AT&T will sell its wireline business and statewide fiber network that provides services to residential, commercial and wholesale customers in Connecticut to Frontier Communications for $2 billion.
The deal includes AT&T's U-verse video and satellite TV customers in Connecticut.
Frontier expects the transaction to be accretive to its adjusted free cash flow per share in the first year. The company says the acquisition gives it greater scale to leverage its network, information technology, engineering, administrative services and procurement capabilities to realize cost synergies and savings of $200 million annually once integration is complete.
Maggie Wilderotter, Frontier's Chairman and Chief Executive Officer said, "We are excited to be acquiring AT&T's wireline operating company in Connecticut, where our company has been headquartered since 1946. This is a great opportunity to bring to Connecticut Frontier's portfolio of products and services, such as Frontier Secure, our industry leading digital security offering that gives customers top-rated online computer protection and premium technical support. It also allows us to introduce our local engagement management model to Connecticut in which Frontier employees provide high-quality service to their friends and neighbors and become actively involved in their communities." Wilderotter added, "We see an opportunity to enhance broadband capabilities in Connecticut. This transaction demonstrates our continued commitment to enhancing shareholder value by improving the sustainability of our dividend, increasing our free cash flow and building on our core product and service strengths."