October 31, 2016
CenturyLink has confirmed its intentions to acquire Level 3 Communications in a deal which could be worth as much as $34 billion.
Considering the money which is being spent in the M&A arena, most would be forgiven for thinking profits in the telco industry weren’t under threat. AT&T announced an audacious $87 billion play to bring Time Warner Cable into its family, and the CenturyLink move perhaps shows there is some nervousness in the industry; we’re facing a problem so let’s throw huge amounts of money at it to make it go away.
“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,” said Glen Post, CenturyLink CEO. “This transaction furthers our commitment to providing our customers with the network to improve their lives and strengthen their businesses. It is this focus on providing fibre connectivity that will continue to distinguish CenturyLink from our competitors.”
The CenturyLink team believes it is getting the best of both worlds. CenturyLink has the larger enterprise customer base, while Level 3 has the global footprint with a combined presence in more than 60 countries. As part of the agreement, CenturyLink will gain an additional 200,000 route miles of fibre, and raise the number of on-net buildings it services to about 75,000.
CenturyLink has been having a tough time of it recently after announcing its third quarter earnings fell to $152 million from $205 million in 2015, but the team is seemingly hoping a $34 billion acquisition will provide it with needed thrust to reverse its dimming fortunes.
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