Will Verizon (VZ) Stock Be Affected by Pause in XO Communications Fiber-Optic Deal?

The FCC is putting a hold on its review of Verizon's (VZ) $1.8 billion deal to buy XO Communications' fiber optic business as it waits for more information.
By Natalie Walters ,

NEW YORK (TheStreet) -- The FCC is pausing its 180-day review process of Verizon Communications' (VZ) - Get Report  agreement to buy XO Communications' fiber optic business for $1.8 billion. 

The agency is putting the deal on hold because it's waiting for additional information from both companies, Reuters reports. 

Verizon first announced its intent to purchase XO Communications in late February and said the deal would help the company extend its fiber-based network. Additionally, the transaction will allow the New York-based telecommunications company to lease XO Communications' wireless spectrum with an option to purchase by the end of 2018. 

In May, Dish Network (DISH) filed a brief with the FCC asking it to reject the deal on the basis that it would discourage competition between Verizon and XO Communications and in the 5G market as a whole since Verizon would have near-complete control of it.

The deal is expected to close in the first half of 2017. 

Shares of Verizon are down 0.18% to $55.52 in early-afternoon trading.

Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:

We rate VERIZON COMMUNICATIONS INC as a Buy with a ratings score of A. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth, expanding profit margins, growth in earnings per share and increase in net income. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

You can view the full analysis from the report here: VZ

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