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Level 3 to Acquire Global Crossing

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Level 3 Communications Inc. announced today that it has entered into a definitive agreement to acquire Global Crossing in an all-stock transaction valued at $3 billion, based upon Level 3’s closing stock price on April 8, 2011.

The combined backbone provider will operate fiber optic networks on three continents connected by long-haul fiber assets and undersea facilities. The new company will serve a worldwide customer set with owned network in more than 50 countries and connections to more than 70 countries.

The transaction will create a company with the ability to meet local, national and global customer requirements in a wide range of markets. The new entity will offer enterprise, government, wholesale, content and small and large Web-based customers a comprehensive portfolio of end-to-end data, video and voice solutions. 

Under the terms of the agreement, Global Crossing shareholders will receive 16 shares of Level 3 common stock for each share of Global Crossing common stock or preferred stock that is owned at closing. The transaction is valued at $23.04 per Global Crossing common or preferred share, or approximately $3.0 billion including the assumption of approximately $1.1 billion of net debt as of Dec. 31, 2010. The combined entity will create a company with revenue of $6.26 billion and earnings of $1.57 billion, after taking into account projected cost savings.

“This is a transformational combination that we believe will deliver significant value to the investors, customers and employees of both Level 3 and Global Crossing,” said Jim Crowe, chief executive officer of Level 3. “The complementary fit between the two companies’ networks, service portfolios and customers is compelling. By leveraging the respective strengths and extensive reach of both companies, we are creating a highly efficient and more extensive global platform that is well-positioned to meet the local and international needs of our customers.”

For more, see the merger website. View this map of the combined network assets.

 


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