Qwest Communications and CenturyLink on Thursday announced that CenturyLink will acquire Qwest in an all-stock deal valuing Qwest at about $10.6 billion.
The move is one of the biggest telecommunications deals by transaction size in some years, especially for land line companies. Combined, Qwest and CenturyLink will have a 173,000-mile fiber network in the United States, according to the vendors.
Qwest and CenturyLink expect the transacation to be completed in the first half of 2011. CenturyLink shareholders are expected to own about 50.5 percent of the company with the rest held by Qwest shareholders.
The combined company's corporate headquarters will remain at CenturyLink's headquarters in Monroe, La., though Qwest's Denver offices will be maintained as a regional headquarters for the newly named Qwest Business Markets Group.
"The combined company's highly recognized national network will significantly expand our ability to deliver strategic and customized product and service solutions to our business, wholesale and government customers throughout the country," said Glen F. Post III, CenturyLink president and CEO, in a statement.
For its part, Qwest spent the early part of the last decade mired in accounting scandals. Some observers say it lost successively more ground to telecom rivals like AT&T and Verizon because it stayed focused on landline operations instead of wireless.
On its channel business side, Qwest's recent focuses have included unified communications and cloud-based networking offerings. Earlier this month, Qwest and IBM announced a pair of new network management suites for large enterprises and midmarket customers.
Edward A. Mueller, Qwest chairman and CEO, said Qwest was "pleased" with the progress Qwest has made and that the combined company will be "well positioned to win."
"This transaction is compelling for our shareholders, who will benefit from an immediate premium for their shares, an increase of approximately 50 percent in the annual dividend, and the opportunity to participate in the upside potential of the combined company through their ownership of CenturyLink stock," Mueller said in a statement.'"We look forward to becoming part of a larger company with a strong financial profile, an industry-leading local and national network, and a shared commitment to customers, employees, communities and shareholders."
Qwest didn't provide any immediate details on what happens to Qwest's channel programs. Last August, two longtime Business Partner Program executives exited the company as Qwest changed the leadership structure inside its sales organization.