CenturyLink, Inc. (NYSE:CTL - News) and Qwest Communications today completed their merger, creating the nation's third largest telecommunications company in the United States. The combined company's increased scale and financial strength will enable it to deliver a broader range of communications services to consumers and small businesses throughout the company's 37-state service area and to business, wholesale and government customers nationwide via its 190,000 route-mile fiber network.
"The combination of our two companies allows us to offer customers of all sizes an even more robust portfolio of communications solutions that will continue to be backed by honest and personal service," said Glen F. Post, III, chief executive officer and president of CenturyLink.
The transaction was structured as a tax-free stock-for-stock exchange. Under the terms of the merger agreement, Qwest stockholders will receive 0.1664 shares of CenturyLink common stock for each share of Qwest common stock they owned at closing, plus cash paid in lieu of fractional shares. The company expects to continue its current annual dividend of $2.90 per share.
CenturyLink expects the combination to be immediately accretive to free cash flow per share, excluding integration costs, and it is expected to generate annual operating and capital synergies of approximately $625 million when fully recognized over the next three to five years. On a pro forma basis, the combined company had revenues of $18.6 billion, adjusted EBITDA of $8.1 billion and adjusted free cash flow of approximately $3.1 billion for the twelve months ended Dec. 31, 2010.
As previously announced, the combined company will use the name CenturyLink, although the Qwest brand will continue to be used in former Qwest markets for the next several months.
The company's board of directors includes current CenturyLink board members and four members of Qwest's board. Those joining the CenturyLink board are Edward A. Mueller, Charles L. Biggs, Michael J. Roberts and James A. Unruh.
The corporate headquarters of the company will remain in Monroe, La. The company will maintain the headquarters for its Business Markets Group in the Denver metro area, where Qwest's headquarters were located. In addition, Denver will be the location of one of the company's six regional headquarters. The other five regional headquarters will be located in Phoenix; Minneapolis; Seattle; Wake Forest, N.C.; and Apopka, Fla.
Qwest shareholders who need additional information or have questions about exchanging shares should visit www.computershare.com/CenturyLink/QwestFAQs.com.