Level 3 Communications (LVLT) shares surged in premarket trading in New York Monday after it said CenturyLink (CTL) - Get CenturyLink, Inc. Report would acquire the telecommunications and internet service provider company in a $34 billion deal.

CenturyLink said it would buy the Broomfield, Colo.-based company in a cash and stock deal worth $26.50 a share in cash and a fixed exchange ratio of 1.4286 of CenturyLink stock for each Level 3 share.

The offer implies a $66.50 per share purchase price and a 42% premium over the Level 3 closing price of $46.92 on October 26. Shares in Level 3 rose sharply on deal speculation late last week, closing at $54.05 Friday, and extended those gains by 11.56% in premarket trading.

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"In addition to the substantial value delivered to shareholders, the combined company will be uniquely positioned to meet the evolving and global needs of enterprise customers," Level 3 CEO Jeff Storey said in a statement.

The combination will give CenturyLink, who has traditionally been focused on phone networks, access to further broadband capabilities.

"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," said Glen Post, CenturyLink's chief executive.

The deal comes at a time of consolidation in the telecoms industry. Last week, AT&T (T) - Get AT&T Inc. Report announced it would buy Time Warner (TWX) in an $85 billion takeover, capping a frenetic month in U.S. mergers and acquisitions.