Verizon announced on Thursday its plan to acquire Frontier Communications in an all-cash deal valued at $20 billion, aiming to enhance its fiber network. The move is part of Verizon’s strategy to bolster its competitive edge against rivals like AT&T by expanding its broadband services.
Verizon has proposed paying $38.50 per share for Frontier, marking a 37.3% premium over Frontier’s closing price on September 3, before acquisition talks became public. Frontier’s shares fell over 9% in premarket trading following the announcement, while Verizon’s stock increased by about 1%.
The acquisition, expected to close in roughly 18 months, will merge Frontier’s 2.2 million fiber subscribers across 25 states with Verizon’s 7.4 million Fios connections spread across nine states and Washington, D.C. Frontier’s footprint includes states such as Texas, California, and several in the Midwest, complementing Verizon’s existing coverage in the Northeast and mid-Atlantic regions.
Verizon CEO Hans Vestberg described the acquisition as a strategic move to enhance Verizon’s market position and competitive capabilities. The deal is projected to deliver at least $500 million in annual cost synergies and boost Verizon’s revenue and adjusted earnings before interest, tax, depreciation, and amortization once completed.
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