Verizon Communications Inc. (NYSE, NASDAQ: VZ) has announced its definitive agreement to acquire Frontier Communications Parent, Inc. (NASDAQ: FYBR) in an all-cash transaction valued at $20 billion. This strategic move aims to 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.
The acquisition will increase Verizon's scale with 2.2 million fiber subscribers and extend its network reach to 25 million premises across 31 states and Washington, D.C. Additionally, the transaction is expected to generate at least $500 million in annual run-rate cost synergies and is projected to be accretive to revenue and adjusted EBITDA growth upon closing.
Frontier has made significant investments in its fiber network, with over 50% of its revenue now derived from fiber products. Verizon, on the other hand, boasts approximately 7.4 million Fios connections in 9 states and Washington, D.C. This acquisition will integrate Frontier’s cutting-edge fiber network into Verizon's leading portfolio of fiber and wireless assets, further strengthening its position as the provider of choice.
The combination of Frontier’s and Verizon’s premium offerings and experiences is expected to provide Frontier customers and those previously outside Verizon’s fiber footprint with more choice and access to premium mobility, home internet, streaming, and connected home offerings, alongside premium business products like Verizon Business Complete.
This acquisition aligns with Verizon’s long-term strategic plan of growing and strengthening customer relationships, and it is expected to expand Verizon’s share of the nationwide broadband market, building upon its two decades of leadership at the forefront of fiber.
In terms of financial benefits, the transaction is expected to be accretive to Verizon's revenue and adjusted EBITDA growth rates upon closing. Additionally, Verizon expects to realize at least $500 million in run-rate cost synergies by year three from benefits of increased scale and distribution and network integration.
The transaction is expected to close in approximately 18 months, subject to approval by Frontier shareholders, receipt of certain regulatory approvals, and other customary closing conditions.
Today the company's shares have moved 37.9% to a price of $38.68. For more information, read the company's full 8-K submission here.
