CenturyLink (CenturyTel, Inc., NYSE: CTL) and Qwest Communications (NYSE: Q) have approved a definitive agreement under which CenturyLink will acquire Qwest in a tax-free, stock-for-stock transaction. Per the deal, Qwest shareholders will receive 0.1664 CenturyLink shares for each share of Qwest common stock they own at closing. According to Qwest, upon closing of the transaction, CenturyLink shareholders are expected to own approximately 50.5 percent and Qwest shareholders are expected to own approximately 49.5 percent of the combined company.
“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,” Glen F. Post III, CenturyLink’s preseident and CEO. “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.”
“The combined company’s highly recognized national network will significantly expand our ability to deliver strategic and customized product and service solutions to our business, wholesale and government customers throughout the country,” he continued. “In addition, we will still maintain the focus on our local markets through our effective regional operating model and targeted marketing strategies. We believe shareholders will benefit through their investment in a company that has greater financial resources and flexibility, including a more diversified revenue base and an enhanced competitive position.”
“Over the last several years, Qwest has been focused on generating sustainable free cash flow and strengthening the balance sheet, as well as creating innovative approaches to drive efficiency and perfect the customer experience,” said Edward A. Mueller, Qwest’s chairman and CEO. “We are pleased with the progress we have made and believe that the combined company will be well positioned to win in an increasingly competitive marketplace.”