CenturyTel, CenturyLink To Buy Qwest: Stock Swap, Merger

by Sudha Krishna | April 22, 2010 at 07:07 am

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CenturyLink, CenturyTel Qwest Merger: $22.4 Billion Telecommunications Deal

CenturyTel has bought Qwest Communications in a $10.3 billion stock swap and assumed $11.8 billion of Qwest debt. The CenturyLink-Qwest merger is a $22.4 billion deal, one of the largest telecommunications deals in years.

Glen F. Post III, CenturyLink’s chief executive officer and president, said, “We believe the combination of CenturyLink’s and Qwest’s employees, assets and service areas will provide us greater scale, scope and expertise and will provide significant benefits for shareholders, customers and our communities. This combination will enhance our ability to deploy innovative IP products and high-bandwidth services to business customers, expand broadband availability and speed to consumers, and offer superior, differentiated video products.

Both Centurytel and Qwest have significant operations in the increasingly shrinking market of land line phones in 40 states across the United States.

When the deal closes, CenturyTel shareholders are expected to own about 50.5% of the company, while Qwest shareholders will own about 49.5%. Some $625 million of cost savings are forecasted within five years of the deal's completion.

Qwest one of the 'baby bells' was a favorite during the 1990s when its value at one point was $60 billion. However, it opted out of the growing wireless market and stuck to broadband and phone services.

The new combined company can now boast a fiber network of 173,000 miles.