Making sense of trends and data

Telecom mergers are a trend

Published 11.7.2016
Mergers are the rage in telecom at the moment. Why? With interest rates low, money for deals is relatively easy to come by. In the case of network owners buying content providers, the goal is more likely to be trying to get around the Federal Communications Commission net neutrality ruling that designated network owners as common carriers.

AT&T wants to acquire Time Warner. Times Warner has three divisions: HBO; Warner Bros. Entertainment and Turner Broadcasting, which include the cable networks TNT, TBS, CNN and Cartoon Network.

AT&T Inc. (NYSE:T) and Time Warner Inc. (NYSE:TWX) announced the proposed acquisition of the latter by the former for $107.50 per share (approximately $85.4 billion) in cash and stock on Saturday. The cries of concern about the ramifications of the deal began shortly after, from consumer groups, trade associations, and at least one presidential candidate.

People are worried about this deal for the same reason they worried when Comcast bought NBC/Universal. This seems to be another example of pipe owners becoming content providers to get around the Federal Communications Commission (FCC).
CenturyLink will buy Level 3 for $34 billion.

CenturyLink will pay Level 3 shareholders $26.50 per share in cash and a fixed exchange ratio of 1.4286 shares of CenturyLink stock for each Level 3 share they own, which totals $66.50 per Level 3 share (based on a CenturyLink $28.00 per share reference price). This represents a premium of approximately 42% based on Level 3's unaffected closing share price of $46.92 on October 26, 2016. When the dust settles, current CenturyLink shareholders will own approximately 51% percent of the combined company.

With the deal, CenturyLink is adding 200,000 route mils of fiber to its network.

The additional fiber-optic network infrastructure includes 64,000 route miles in 350 metropolitan areas and 33,000 undersea cable route miles that connect multiple continents. CenturyLink's on-net buildings will increase by nearly 75% to approximately 75,000, including 10,000 buildings in EMEA and Latin America, the company estimates.

Windstream and Earthlink plan to merge in a $1.1 billion deal.

Windstream Holdings Inc. announced Monday a $1.1 billion merger with EarthLink Holdings Corp. in an all-stock deal, that includes the assumption of debt.



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