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Qwest acquires EUnet
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March 26, 1998: 11:14 a.m. ET
U.S. firm buying Dutch company to capitalize on European 'Net market
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NEW YORK (CNNfn) - Qwest Communications International Inc. said Thursday it will acquire Amsterdam-based Internet service provider EUnet International for approximately $154 million.
Both companies' board of directors have approved the acquisition, and completion of the deal is expected within 30 days.
EUnet shareholders will receive approximately $135.5 million in newly issued shares of Qwest common stock and approximately $4.5 million cash. The remaining $14.4 million will be paid either in cash or additional Qwest shares.
EUnet reported 1997 revenue of $55 million. Qwest, a multimedia communications company, said it expects EUnet's 1998 revenue to exceed $75 million.
EUnet has operating units in 13 European countries. Qwest said the acquisition will allow it to take advantage of the growing Internet market in Europe.
"The European data market is exploding to an estimated $55 billion by the year 2000," said Joseph P. Nacchio, Qwest president and chief executive officer. "The Internet is the driving force behind this trend."
Qwest said it also will fund EUnet's recent acquisition of a 50 percent interest in X-Link, a German Internet service provider.
Qwest currently is building a fiber-optic network for delivering multimedia content. Randall Roth, an analyst at Renaissance Capital Corp., said the acquisition of EUnet will help Qwest compete with other companies in providing high-speed Internet access.
"There's a lot of competition with cable modem companies right now," Roth said. "EUnet is an established brand name, so this gives Qwest a window to that market."
Earlier this month, Qwest announced a $4.4 billion merger with U.S. long-distance carrier LCI International, Inc. to create the fourth- largest long distance phone company in the United States.
Qwest (QWST) shares climbed 7/8 to 40 in early trading Thursday. 
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