Verizon agrees to buy Frontier for $9.6 billion in cash
![A Verizon store in New York on Jan. 12. MUST CREDIT: Angus Mordant/Bloomberg (Angus Mordant/Bloomberg)](https://thumb.spokesman.com/uO6q6eDqVn9RLDznlEJuDvMVKgE=/600x0/media.spokesman.com/graphics/2018/07/sr-loader.png)
Verizon Communications Inc. agreed to buy rival telecommunications operator Frontier Communications Parent Inc. for about $9.59 billion in cash as the New York phone giant looks for ways to improve its high-speed internet offer.
Frontier’s investors will get $38.50 a share, a 37% premium to the $28.04 closing price on Tuesday, the day before news of a pending deal came out, Verizon said in a statement on Thursday. The transaction values the Dallas-based company at $20 billion including debt.
Frontier, which emerged from bankruptcy in 2021, bills itself as the “largest pure-play fiber internet company in the U.S.” Telecommunications companies like Verizon are bulking up on fiber assets to add capacity for customers’ surging data use. The flow of data is expected to grow even further as more companies adopt artificial intelligence. In July, T-Mobile U.S. Inc. said it would invest $4.9 billion in a joint venture with private equity firm KKR & Co. to buy fiber-optic internet service provider Metronet.
Frontier shares fell 9.2% in premarket trading before New York exchanges opened. The company’s stock had gained 38% to $38.68 on Wednesday after the Wall Street Journal first reported the talks. Verizon had declined 3.4% in New York on Wednesday to $41.48.
The boards of Verizon and Frontier have approved the deal, which is expected to close in about 18 months if shareholders and regulators agree to it. Verizon also reaffirmed its full-year guidance in the statement.
Frontier initiated an internal review of its business earlier this year. The company has faced pressure from activist investor Jana Partners to improve its returns. It reported sales of $5.8 billion in 2023, with about 52% of total revenue from activities related to its fiber-optic products.
In 2015, Verizon sold parts of its landline phone business in California, Florida and Texas to Frontier for $10.54 billion.