Verizon has confirmed it will acquire Frontier Communications for $20 billion in an all-cash transaction.
Initially reported by The Wall Street Journal yesterday, the telco has now confirmed the acquisition.
The deal is set to bolster Verizon's fiber network, allowing it to compete with rival telco AT&T.
Under the agreement, Verizon is set to buy Frontier for $38.50 per share in cash.
Verizon stated the deal would also expand its intelligent Edge network to include digital innovations like AI and IoT.
Frontier provides broadband connection to around 7.2 million locations across 25 states and has 2.2 million fiber customers.
At present, Verizon provides fiber services via its Fios offering. The company has around 18 million fiber locations across the country.
“Connectivity is essential in nearly every part of our lives and work, and no one delivers better than Verizon,” said Verizon Chairman and CEO Hans Vestberg. “Verizon offers more choice, flexibility, and value, and we continuously look for ways to provide the best product and network experience to our customers as we bolster our position as the provider of choice.
“The acquisition of Frontier is a strategic fit. It will build on Verizon’s two decades of leadership at the forefront of fiber and is an opportunity to become more competitive in more markets throughout the United States, enhancing our ability to deliver premium offerings to millions more customers across a combined fiber network.”
Combined, Verizon and Frontier have approximately 10 million fiber customers across 31 states and Washington D.C. with fiber networks passing more than 25 million premises.
Frontier had previously acquired Verizon’s rural fixed-line assets for $6.8bn in 2010, covering 14 states, before snapping up operations in California, Florida, and Texas for $10.5bn in 2015.
Rival telco AT&T serves around 8.3 million fiber customers in the US, and like Verizon, has sought to expand its fiber offering in recent years.
In May of last year, AT&T and investment management company BlackRock formed Gigapower, LLC, a joint venture to provide fiber broadband services to Internet service providers and businesses across parts of the US.
More recently T-Mobile has outlined its own fiber ambitions, first through the acquisition of Lumos Networks as part of a joint venture (JV) with EQT Infrastructure in April. Then in July, the company agreed to set up a JV with investment firm KKR to acquire fiber Internet service provider Metronet. As part of the agreement, T-Mobile and KKR will scoop up Metronet's broadband infrastructure, its fiber business operations, and existing customers.
