NEW YORK, Feb. 22, 2016 /PRNewswire/— In a move to continue to strengthen the foundation of America’s best networks, Verizon Communications Inc. (NYSE, NASDAQ: VZ) today announced it has signed an agreement to purchase XO Communications’ fiber-optic network business for approximately $1.8 billion.
Verizon’s ownership of XO’s fiber-based IP (Internet protocol) and Ethernet networks will help better serve enterprise and wholesale customers. In addition, acquired fiber facilities will help Verizon continue to densify its cell network.
The transaction is subject to customary regulatory approvals and is expected to close in the first half of 2017.
Verizon expects to receive several financial benefits from the transaction, including a step-up in the basis of the assets as well as operating and capital expense savings. The net present value of the operational synergies is expected to be in excess of $1.5 billion.
Separately, Verizon will simultaneously lease available XO wireless spectrum, with an option to buy XO’s entity that holds its spectrum by year-end 2018.
Citigroup Global Markets Inc acted as financial adviser and Debevoise & Plimpton LLP acted as legal adviser to Verizon.
Verizon Communications Inc. (NYSE, NASDAQ: VZ) employs a diverse workforce of 177,700 and generated nearly $132 billion in 2015 revenues. Verizon operates America’s most reliable wireless network, with more than 112 million retail connections nationwide. Headquartered in New York, the company also provides communications and entertainment services over America’s most advanced fiber-optic network, and delivers integrated business solutions to customers worldwide.
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