Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

CenturyTel, Qwest in $10.6 billion merger

By Ben Rooney, staff reporter


NEW YORK (CNNMoney.com) -- In one of the largest telecommunication mergers in years, CenturyTel Inc. announced Thursday it will acquire Qwest Communications in a $10.6 billion all-stock transaction.

The combined companies will have operations in 37 states providing land line, broadband and video services on a 173,000-mile fiber network, the companies said.

Under the terms of the deal, Qwest shareholders will receive 0.1664 CenturyTel shares for each share of Qwest common stock they own. Based on Wednesday's closing price, Qwest shareholders will get the equivalent to $6.02 per share of CenturyTel stock, a 15% premium.

Including $11.8 billion of Qwest debt, the merger has an enterprise value of $22.4 billion, the companies said. The deal is expected to result in $625 million of cost savings.

"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," Glen Post III, CenturyTel's chief executive officer, said in a statement.

The merger comes as both companies struggle to compete with larger telecom companies such as AT&T (T, Fortune 500) and Verizon (VZ, Fortune 500).

In addition to 5 million broadband customers, the companies boast a combined 17 million access lines, 1.4 million video subscribers and 850,000 wireless users.

"We look forward to becoming part of a larger company with a strong financial profile," Edward Mueller, Qwest's chief executive officer, said in a statement.

When the deal closes, CenturyTel (CTL) shareholders are expected to own about 50.5% of the company, while Qwest (Q, Fortune 500) shareholders will control about 49.5%. To top of page

Search for Jobs

Index Last Change % Change
Dow 17,873.22 44.93 0.25%
Nasdaq 4,933.51 31.74 0.65%
S&P 500 2,099.06 8.96 0.43%
Treasuries 1.85 0.03 1.54%
Data as of 9:56am ET
Company Price Change % Change
Bank of America Corp... 14.88 0.18 1.22%
Coca-Cola Enterprise... 51.55 0.69 1.36%
Baxalta Inc 45.53 -0.17 -0.37%
Apple Inc 100.35 -0.06 -0.06%
Micron Technology In... 12.31 0.36 3.01%
Data as of May 27
Sponsors

Sections

Janet Yellen hinted again Friday that a June or July interest rate hike is a very real possibility. More

The FBI has opened a national security investigation into the hacking of Bangladesh's central bank amid signs that the hack might have come from North Korea. More

The gender pay gap in the labor market is pretty well documented. But the gender gap also exists in the housing market. More