Verizon is set to acquire Frontier Communications in a $20 billion all-cash deal, a move aimed at expanding its fiber-optic footprint and boosting competitiveness against rivals like AT&T and T-Mobile.
The purchase offers Verizon access to Frontier’s 2.2 million fiber subscribers across 25 states, complementing its existing 7.4 million users in the Northeast and mid-Atlantic.
The deal, priced at $38.50 per share, reflects a 37.3% premium over Frontier’s closing stock price before acquisition rumors surfaced.
With $11.25 billion of Frontier’s debt set to be refinanced by Verizon, the merger will result in a combined 25 million fiber passings—just shy of AT&T’s 28 million.
Despite the strategic business advantage, some analysts see the impact as modest.
Craig Moffett from MoffettNathanson highlighted that Verizon’s fiber coverage would increase from less than 10% to just over 13%, noting, “There’s simply no conceivable path where they can reach meaningful scale with fiber.”
Verizon CEO Hans Vestberg emphasized the business opportunity, stating that the acquisition is a “strategic fit” and positions Verizon for enhanced competition in new markets, including the Midwest, Texas, and California.
This deal also marks a reunion, as Verizon sold part of its fiber business to Frontier in 2016.
While shares of Frontier surged nearly 38% upon the news, Verizon’s stock showed a marginal decline.
The transaction is expected to close in about 18 months, marking a significant step in Verizon’s fiber strategy, but still leaving it behind key competitors in overall market scale.
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