Verizon selling wirelines in 14 states to Frontier for $6.8 billion

13 May 2009

Verizon Communications will sell its rural area wireline business in 14 American states to Frontier Communications for $8.6 billion in a stock and cash-cum-debt deal, that will leave Verizon holders with a majority stake in Frontier.

Under the deal, Verizon will transfer its wirelines in Arizona, Idaho, Illinois, Indiana, Michigan, Nevada, North Carolina, Ohio, Oregon, South Carolina, Washington, West Virginia and Wisconsion, and parts of California bordering Arizona, Nevada and Oregon to Frontier.

These states account for 4.8 million local access lines, 2.2 million long-distance customers, 1 million high-speed data customers, including 110,000 FiOS internet customers, and 69,000 FiOS TV customers, reports said.

Verizon will spin off the wirelines as a separate company, which will then be merged with Frontier.

Verizon will receive $5.3 billion in Frontier common stock, plus $3.3 billion in a combination of cash, debt and assumed debt issued by Verizon subsidiaries.

Verizon holders will receive one share of Frontier for every 4.2 Verizon shares they hold on the record date.