Verizon Sells 4.8 Million Landlines for Stock

In a move to focus on its wireless and FiOS businesses, Verizon(VZ Quote) announced today that it is selling 4.8 million of its landlines to Frontier Communications(FTR Quote) for $5.25 billion in stock.

While the deal has its risks for Frontier -- in light of the fact that increasing numbers of consumers are relying on cell phones and eliminating home phone lines -- the spin-off allows Verizon to pay down debt and fund its goal to provide speedier Internet and television service.

During the "Mad Money" Lightning Round on Tuesday, Jim Cramer said he is a fan of the company and pulling the trigger on Verizon.

Verizon shareholders will receive out of the deal one share of Frontier stock for roughly every 4.2 shares of Verizon stock held and could end up owning up to 68% of Frontier. The exact amount will be determined when the deal closes within the year.

The new entity would pay an annual dividend of 75 cents a share.

The sale includes all of Verizon's phone lines in Arizona, Idaho, Illinois, Indiana, Michigan, Nevada, North Carolina, Ohio, Oregon, South Carolina, Washington, West Virginia and Wisconsin, as well as some assets in border areas of California.

Last year Verizon sold off phone lines in Maine, New Hampshire and Vermont for $2.3 billion to Fairpoint Communications.

Verizon lines in Connecticut, Delaware, the District of Columbia, Florida, Maryland, Massachusetts, New Jersey, New York, Pennsylvania, Rhode Island, Texas and Virginia and most of California are not affected by the deal.

Verizon reported a 5% growth in first-quarter earnings in April, boosted by strength in its wireless unit and acquisition of Alltel, a smaller mobile operator.