Verizon acquires Frontier in an all-cash deal worth $20 billion

Verizon has announced that it is acquiring Frontier Communications in a deal worth $20 billion. The telecom giant is going to expand its fiber network across the US with Frontier’s acquisition. Following the deal, Frontier’s existing fiber consumers across 25 states in the country will join Verizon’s existing Fios connections.

The acquisition would be a reunion of the brands. Verizon had sold its TV and internet business in many major states to Frontier in 2016 for a deal worth $10.54 billion.

Frontier’s fiber network will integrate into Verizon’s Fios network after the acquisition

Once the deal is closed, Frontier’s consumer fiber network in the US will immediately integrate into Verizon’s Fios network. Frontier’s current 2.2 million fiber consumers across 25 states in the US will join Verizon’s 7.4 million Fios connections in nine states and Washington, D.C. Together, the brands have approx. 10 million fiber consumers across 31 states and Washington, D.C. “The acquisition of Frontier is a strategic fit,” Verizon CEO Hans Vestberg said, as it provided an opportunity to be more competitive in more markets.

Notably, Verizon and Frontier will now have 25 million fiber passings across the US. These are potential consumer locations where a fiber network passes by. In comparison, AT&T currently has nearly around 28 million fiber locations. Furthermore, Verizon is committed to its plans to launch an additional 2.8 million fiber locations by the end of 2026. It will help the telco better compete against the market leaders like AT&T.

Currently, Verizon’s fiber network covers less than 10 percent of regions in the US. The acquisition will provide it with roughly another 3 percent coverage. To compare, AT&T covers nearly 15 percent area in the country.

The $20 billion deal will close in approximately 18 months

According to Verizon’s press release, its acquisition of Frontier is an all-cash deal that’s worth $20 billion. Under the agreement, Verizon will acquire Frontier for $38.50 per share. It represents a premium of 37.3 percent to Frontier’s closing share price on September 3, 2024.

The acquisition will close in approximately 18 months, depending on approval by Frontier shareholders and regulators.