Frontier Communications Corporation (NASDAQ:FTR) announced today that it has entered into a definitive agreement with AT&T, Inc. (NYSE:T) to acquire AT&T’s wireline business and statewide fiber network that provides services to residential, commercial and wholesale customers in Connecticut. As part of the transaction, Frontier will also acquire AT&T’s U-verse video and satellite TV customers in Connecticut. Frontier will pay AT&T $2 billion in cash for the business and related assets. Frontier’s extensive experience operating local and national communications networks and providing communications services to residential and commercial customers throughout the country will contribute to the success of this transaction.
Frontier’s shareholders, customers, local communities and employees will benefit substantially as a result of this transaction:
- The transaction is estimated to be accretive to Frontier’s adjusted free cash flow per share in the first year.
- The transaction is estimated to improve Frontier’s dividend payout ratio by more than 5 percentage points in the first year.
- The all-cash transaction means Frontier shareholders will receive the benefit of increased diversification of assets and operations without any dilution in ownership.
- Frontier will have greater scale to leverage its network, information technology, engineering, administrative services and procurement capabilities to realize cost synergies and savings of $200 million annually once integration is complete.
- Frontier will implement its proven local engagement community-oriented go-to-market strategy in Connecticut led by local General Managers and a State Leader.
- Connecticut customers will have the same products and services that they currently enjoy, including the U-verse suite of products.
Maggie Wilderotter, Frontier’s Chairman and Chief Executive Officer said, “We are excited to be acquiring AT&T’s wireline operating company in Connecticut, where our company has been headquartered since 1946. This is a great opportunity to bring to Connecticut Frontier’s portfolio of products and services, such as Frontier Secure, our industry leading digital security offering that gives customers top-rated online computer protection and premium technical support. It also allows us to introduce our local engagement management model to Connecticut in which Frontier employees provide high-quality service to their friends and neighbors and become actively involved in their communities.” Wilderotter added, “We see an opportunity to enhance broadband capabilities in Connecticut. This transaction demonstrates our continued commitment to enhancing shareholder value by improving the sustainability of our dividend, increasing our free cash flow and building on our core product and service strengths.”