NEW YORK (

TheStreet

) -- Money-losing broadband network operator

Level 3

(LVLT)

agreed Monday to a $1.9 billion all-stock deal for its profitless undersea cable system rival,

Global Crossing

( GLBC).

Level 3 said it will exchange 16 shares for each share of Global Crossing, putting the value at $23 a share, a 56% premium to Global Crossing's closing price Friday.

Investors cheered both players in the deal, sending Global Crossing up 56% and Level 3 up 11% Monday.

The move to acquire its rival helps Level 3 expand its international reach, particularly in Asia.

Level 3 will also add $1.1 billion in Global Crossing's debt onto its $6.5 billion debt load. The oversized debt and the absence of profits has been a consistent challenge for the company over the past 13 years.

And while Global Crossing has restructured once in bankruptcy, Level 3 has managed to narrowly

avoid that move

by picking up non-networking businesses like a pair of software distributors in 2005.

If the Global Crossing deal is approved, Level 3 will stand as one of the largest operators of fiber optic networks in the world. This position may help it control some of the cut-throat pricing in the wholesale telco business that has long been

a drag on Level 3's

performance.

--Written by Scott Moritz in New York.>To contact this writer, click here: Scott Moritz, or email: scott.moritz@thestreet.com.To follow Scott on Twitter, go to http://twitter.com/MoritzDispatch.>To send a tip, email: tips@thestreet.com.