Telecom giant CenturyLink's multi-billion dollar acquisition of enterprise cloud infrastructure and hosting provider Savvis overcame two key barriers this week with approvals from Savvis stockholders and the Federal Communications Commission (FCC).
CenturyLink in April said it planned to acquire Savvis in a deal worth $3.2 billion -- $2.5 billion cash and stock, and $700 million in Savvis debt.
St. Louis-based Savvis and Monroe, La.-based CenturyLink on Wednesday said that Savvis stockholders have voted to approve all proposals related to the merger with CenturyLink, through which Savvis will become a wholly-owned CenturyLink subsidiary.
"Approximately 99 percent of the votes cast -- representing 86 percent of Savvis' shares outstanding -- voted to adopt the merger agreement at Savvis' special stockholders meeting held today in St. Louis," the two companies said Wednesday.
Stockholder approval paves the way for the transaction to close on July 15, subject to satisfaction of the remaining merger conditions.
The thumbs up from Savvis shareholders to move forward comes just a day after the FCC approved the merger. Along with getting the go-ahead from the FCC, the merger had already received an early termination notice under the Hart-Scott-Rodino Act from the Department of Justice and the Federal Trade Commission.
"We are pleased to receive the FCC's approval and appreciate the Commission's prompt review of our request," Glen F. Post, III, CenturyLink CEO and president, said in a statement. "The combination of CenturyLink's hosting and network assets with Savvis' proven solutions in collocation, managed hosting and cloud services substantially enhances CenturyLink's data services capabilities and provides the company with a solid platform for future growth."
With the proper approvals now in-hand, the companies expect to start combining their operations later this year. The integrated hosting business will operate under the Savvis brand for the foreseeable future and will be based in St. Louis, CenturyLink said. That business will be headed Savvis CEO James E. Ousley.
"By leveraging CenturyLink's leading network capabilities and relationships with businesses across the United States, Savvis is positioned for leadership in meeting the growing customer demand for outsourced IT and cloud services, and can deliver these services to a broader base of customers at an accelerated pace," Ousley said in a statement. "We look forward to using our world-class platform to provide customers with innovative solutions to meet the challenges of today, tomorrow and many years to come."
The closing of CenturyLink's acquisition of Savvis continues a major push by traditional telcos, cable companies and carriers to dominate the cloud computing market.
Earlier this year, Verizon Communications bought cloud computing provider Terremark in a $1.4 billion deal to gain a stronger foothold in the increasingly competitive cloud computing space. On the heels of that, Time Warner Cable opened its wallet to buy cloud hosting player NaviSite for $220 million. And AT&T has vowed to invest $1 billion in cloud services and mobility this year.