Verizon today confirmed a pair of transactions that will net the carrier more than $15 billion.
Verizon will sell its wireline operations in California, Florida and Texas to Frontier Communications for $10.54 billion ($9.9 billion in cash and $600 million in assumed debt).
Verizon will also lease the rights to 11,300 towers and sell an additional 165 towers to American Tower for $5 billion.
Both deals had been mentioned in unconfirmed reports from the Wall Street Journal.
Verizon will also today begin a $5 billion share buyback program.
“Our long-standing strategy has been to consistently invest in our networks, improve our customers’ experience, and develop new products and services while delivering profitable growth. These transactions will further strengthen Verizon’s focus on extending our industry leadership position in our core markets and return significant value to our shareholders,” Verizon Chairman and CEO Lowell McAdam said in a statement.
Verizon said the sale of its wireline assets will allow it to focus on its remaining eastern U.S. markets. Frontier is expected to take on about 11,000 Verizon employees after the transaction is complete.
The deal between Verizon and American Tower will give American Tower 28 years of exclusive lease rights over the towers acquired from Verizon. Verizon has agreed to lease capacity from American Tower for a minimum of 10 years at a rate of $1,900 per month on each tower.
At that lease rate, 10 years of capacity from 11,300 towers will cost Verizon more than $2.57 billion.
Verizon expects the Frontier transaction to close by early 2016 and the American Tower deal to close by mid-2015.
Correction: A previous version of this article said the Frontier deal is expected to close by early 2106.
Filed Under: Carriers
