Verizon Inks $20B Deal to Buy Frontier Communications

Verizon Communications announced a $20 billion all-cash deal to acquire rival telecommunications operator Frontier Communications, the largest pure-play fiber internet provider in the U.S.

Verizon will pay $38.50 a share, representing a premium of 43.7% to Frontier’s 90-day volume-weighted average share price on September 3, the last trading day prior to media reports regarding a potential acquisition of Frontier.

“This strategic acquisition of the largest pure-play fiber internet provider in the U.S. will significantly expand Verizon’s fiber footprint across the nation, accelerating the company’s delivery of premium mobility and broadband services to current and new customers,” Verizon said.

Over the past four years, Frontier has invested $4.1 billion upgrading and expanding its fiber network, and now generates more than 50% of its revenue from fiber products.

Verizon expects to realize at least $500 million in run-rate cost synergies by year three from the benefits of increased scale and distribution and network integration. If the deal is terminated under certain conditions, Verizon will pay Frontier a 590 million fee. The deal integrates Frontier’s advanced fiber network, which encompasses 2.2 million subscribers across 25 states and Washington, D.C., into Verizon’s portfolio of fiber and wireless assets.

In addition to the deal announcement, Verizon also reaffirmed its full-year 2024 guidance, including adjusted EPS of $4.50 to $4.70 and wireless service revenue growth of 2% to 3.5%.

Centerview Partners and Morgan Stanley were the financial advisors to Verizon, while Barclays advised Frontier.