NEW YORK (TheStreet) -- Shares of CenturyLink (CTL) - Get Report were sliding 9.11% to $27.62 on heavy trading volume early Monday morning after the company said it would buy Level 3 Communications (LVLT) in a $34 billion or $66.50 per share cash-and-stock deal, including the assumption of debt.

CenturyLink will pay $26.50 in cash and about 1.43 shares of CenturyLink per each share of Level 3. The agreement represents a 42% premium over Level 3's closing price on October 26 of $46.92.

Combining the two communications companies will allow CenturyLink to leverage its own enterprise consumer base with Level 3's global presence.

"The digital economy relies on broadband connectivity, and together with Level 3 we will have one of the most robust fiber network and high-speed data services companies in the world," CenturyLink CEO Glen Post said in a statement.

Northland said this morning that the proposed merger between CenturyLink and Level 3 is a "neutral" at worst, the Fly reports.

The companies expect the transaction to close by the end of the 2017 third quarter.

Additionally, CenturyLink posted better-than-anticipated 2016 third quarter earnings today.

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Adjusted earnings of 56 cents per share topped analysts' estimates of 55 cents per share. Revenue of $4.38 billion for the period met Wall Street's projections.

For the fourth quarter, Monroe, LA-based CenturyLink expects earnings per share between 53 cents and 59 cents on revenue of $4.28 billion to $4.34 billion. Analysts are modeling earnings of 64 cents per share on revenue of $4.38 billion.

Early Monday morning more than 5.59 million CenturyLink shares had traded vs. the 30-day average of 5.37 million.

Shares of Level 3 were rising on heavy trading volume early Monday morning. Over 4.92 million shares of Level 3 have traded so far today vs. the 30-day average of 3.68 million.

Separately, TheStreet Ratings objectively rated CenturyLink 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 rated this stock as a "hold" with a ratings score of C+.

The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet.

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

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