Global Crossing and Frontier today announced their $11.2 billion merger. This union creates a global Internet protocol-based network offering Internet, data, long-distance, local-telephone and conferencing services.
Global Crossing owns and operates an international fiber-optic network while Frontier is a large U.S. telecom company that sells facilities-based integrated communications and Internet services. Together they will have more than 1 million fiber miles reaching 159 cities in 20 countries offering voice, Web hosting, private line, and ATM and Internet services, the two companies said in a press release.
Frontier provides local phone service in 32 U.S. states and the District of Columbia, while Global Crossing's network plans to span four continents.
Most recently, Global Crossing announced its plans for the South American Crossing network and an expansion of its pan-European network.
Frontier's U.S. fiber network will give Global Crossing long distance and local connectivity, a range of data and Internet services, and sales and support capabilities, the companies said. The network will supplement the IP-based fiber network that Global Crossing is building in Europe, Japan, Mexico, and Central and South America, according to a statement from Robert Annunziata, CEO of Global Crossing.
Both boards of directors have approved the merger in which Frontier shareholders will receive Global Crossing common shares valued at $62 for their Frontier shares (subject to certain agreement provisions). Based on current market prices, the merged company will be approximately two-thirds owned by Global Crossing shareholders and one-third owned by Frontier shareholders, the companies said.
The transaction is subject to shareholder approval and the companies expect to complete the transaction by the third quarter of this year. The new company will have combined annual sales in excess of $4 billion and more than 8,500 employees. Joseph P. Clayton, Frontier's CEO will become a Global Crossing vice chairman.
Global Crossing and Frontier will host a conference call today at 11:00 a.m. EST to discuss the proposed merger.
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