Verizon, a big phone company, said it will buy Frontier, another company that provides internet and phone services, for $20 billion. They’re paying $38.50 for each share of Frontier, which is more than what the shares were worth before people knew about the deal.
This deal will help Verizon offer faster internet to more people across the United States.
Frontier has customers in 25 states who use its fast internet, and when you add that to Verizon’s customers, they’ll have a lot more people using their services.
Verizon’s fast internet is mostly in the Northeast and mid-Atlantic, but Frontier’s is in many other places, like the Midwest and California.
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The deal should be finished in about a year and a half. Because of this news, Frontier’s stock price went down a bit before the market opened, but Verizon’s went up a little.
“The acquisition of Frontier is a strategic fit. It will build on Verizon’s two decades of leadership … and is an opportunity to become more competitive in more markets throughout the United States,” Verizon CEO Hans Vestberg said in a statement.
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The deal is projected to generate at least $500 million in annual run-rate cost synergies, and will add to Verizon’s revenue and adjusted earnings before interest, tax, depreciation, and amortization growth upon closing.
