Friday, April 1, 2016

Verizon Completes $10.5 Billion Transaction with Frontier

Verizon completed its previously disclosed sale of landline assets in California, Florida and Texas to Frontier Communications.  The deal was valued at approximately $10.5 billion (approximately $7.5 billion net of income taxes), subject to certain adjustments and including Frontier’s assumption of $0.6 billion in debt.

Frontier Communications now owns and operates these landline businesses, which include broadband, video, voice and Fios operations in the three states. The sale does not include the services, offerings or assets of other Verizon businesses, such as Verizon Wireless and Verizon Enterprise Solutions. Approximately 9,400 Verizon employees in California, Florida and Texas were transferred to Frontier.

Verizon said the sale concentrates its remaining landline operations in contiguous northeast markets – which will enhance the efficiency of the company’s marketing, sales and service operations across its remaining landline footprint.

  • The deal was first announced in February 2015. At the time, the companies said the transaction involved 3.7 million voice connections, 2.2 million broadband connections, and 1.2 million FiOS video connections. The network being acquired was the result of substantial capital investments by Verizon and was 54 percent FiOS enabled. Verizon spent more than $7 billion in the buildout of FiOS in the acquired territories.
  • In October 2014, Frontier Communications completed its previously announced $2 billion acquisition of AT&T’s wireline business, statewide fiber network, and U-verse operations in Connecticut. As part of the acquisition, Frontier also acquired AT&T’s DISH satellite TV customers in Connecticut. 
  • In 2010, Verizon divested its local wireline operations serving residential and small-business customers in predominantly rural areas in 14 states by selling these operations to Frontier Communications. The deal included all of Verizon's local wireline operating territories in Arizona, Idaho, Illinois, Indiana, Michigan, Nevada, North Carolina, Ohio, Oregon, South Carolina, Washington, West Virginia and Wisconsin. Also included were fiber-to-the-premises assets deployed by Verizon in 41 local franchises in Indiana.