Verizon Communications Inc. (NYSE, NASDAQ: VZ) and Frontier Communications Parent, Inc. (NASDAQ: FYBR) announced a definitive agreement in which Verizon will acquire Frontier in an all-cash deal valued at $20 billion. This acquisition will expand Verizon’s fiber footprint, enhancing its ability to deliver premium mobility and broadband services nationwide. As the largest pure-play fiber internet provider in the U.S., Frontier brings a robust fiber network, with over 2.2 million fiber subscribers and 7.2 million fiber locations in 25 states.
Verizon plans to integrate Frontier’s fiber infrastructure into its existing portfolio, including its Fios offering. This move will extend Verizon’s reach, allowing it to deliver more choices and advanced network experiences to both existing and new customers. Over the past four years, Frontier has invested $4.1 billion to upgrade and expand its fiber network, which now generates more than half of its revenue from fiber products.
Verizon CEO Hans Vestberg highlighted the acquisition as a strategic fit, enhancing the company’s competitiveness across more U.S. markets. Frontier CEO Nick Jeffery emphasized that the deal validates Frontier’s efforts to build a top-tier fiber network and offers significant value to shareholders.
Key benefits include:
- Extended premium offerings to Frontier’s consumer and business customers.
- Increased fiber network scale and distribution.
- Improved customer retention and loyalty by combining broadband and mobility services.
- Expanded market reach across Frontier’s territories, complementing Verizon’s existing Northeast and Mid-Atlantic markets.
Financially, the deal is expected to be accretive to Verizon’s revenue and Adjusted EBITDA growth upon closing. Verizon anticipates achieving at least $500 million in cost synergies by year three from network integration and increased scale.
Verizon will acquire Frontier for $38.50 per share in cash, a 43.7% premium to Frontier’s 90-day volume-weighted average price. The acquisition, unanimously approved by both companies’ boards, is expected to close within 18 months, pending regulatory and shareholder approvals.
Verizon reaffirmed its 2024 guidance, including wireless service revenue growth of 2.0% to 3.5%, Adjusted EBITDA growth of 1.0% to 3.0%, and capital expenditures between $17.0 billion and $17.5 billion.
Verizon and Frontier management teams, along with legal and financial advisors, will continue to manage the transaction through its completion.
