Arizona regulators have approved Frontier Communications Inc.’s purchase of a big slice of Verizon Communications Inc.’s regulated landline business.
Verizon and Frontier struck a bargain last May calling for Frontier to acquire some 7 million Verizon access lines in 14 states. The deal—valued by the companies at $8.6 billion—calls for Frontier to pay for the Verizon assets with stock. Arizona is the fifth state to green-light the swap.
Frontier expects to complete the acquisition in the second quarter, the company states in a Feb. 18 Securities and Exchange Commission filing. The sale would transfer some 16,000 Verizon workers to Frontier and make Frontier the largest U.S. rural telecommunications carrier.
Because landlines are a declining segment of the U.S. telecom market and a low-margin business, some see the acquisition as risky. Frontier chairman and CEO Maggie Wilderotter has said she sees opportunities for growth by offering video and broadband connections in areas where Verizon has not offered such service.
Frontier stock (NYSE:FTR) was trading this morning at $7.63 a share, down 15 cents.
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