CenturyLink has announced that it will pay $34bn to acquire network infrastructure giant Level 3 Communications. The deal is expected to close in around a year’s time.
CenturyLink explained that the deal will enlarge the firm's customer base and provide a presence in over 60 nations worldwide. It will also make it more financially beneficial to invest in upgrading the combined network across the world.
Glen Post, CenturyLink CEO, said that the deal will give the company a network on the scale necessary to provide businesses worldwide with high-speed connectivity.
"The digital economy relies on broadband connectivity, and together with Level 3 we will have one of the most robust fibre network and high-speed data services companies in the world," he said.
"It is this focus on providing fibre connectivity that will continue to distinguish CenturyLink from our competitors.”
The acquisition will add 200,000 route miles of fibre network to CenturyLink's business, including 64,000 route miles in 350 metropolitan areas and 33,000 subsea route miles.
As a result, CenturyLink said that its customer base of connected buildings will grow by almost 75 per cent to around 75,000, including 10,000 buildings in EMEA and Latin America.
"Overall, the complementary domestic and international networks will provide cost efficiencies by focusing capital investment on increasing capacity and extending the reach of the combined company's high-bandwidth fibre network," the firm said.
Level 3 CEO Jeff Storey added that the deal comes at the right time for the company and its shareholders.
"In addition to the substantial value delivered to shareholders, the combined company will be uniquely positioned to meet the evolving and global needs of enterprise customers," he said.
Post will remain in charge of the newly combined firms under the CenturyLink name, but it was not made clear whether there is a post-merger role for Storey.
It is also unclear what will happen to many of the staff at Level 3 and CenturyLink where roles overlap, although it seems likely that the deal will eventually lead to some job losses.
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