Level 3 Communications Inc. said Monday it will acquire Global Crossing Limited in a stock transaction valued at about $3 billion in a move the companies say will amass a hulking global networking force.
Once approved, Level 3 said the combined company will operate a global services platform anchored by fiber optic networks on three continents -- North America, Europe and Asia -- and connected by extensive undersea facilities capable of serving more than 70 countries.
Both companies said their combined networks will offer enterprise, government, wholesale, content and Web-based customers full end-to-end data, video and voice plays. Global Crossing offers IP, Ethernet, data center and video solutions and delivers a breadth of data, voice, collaboration and media services like VoIP, VPN, lease lines, video and audio conferencing, collocation and more.
The combined Level 3-Global Crossing play will offer a portfolio of transport, IP and data solutions, content deliver, data center, collocation and voice services. Adding Global Crossing to the mix will add managed services, collaboration services and inter-continental VPN capabilities that will arm the duo to better attack the enterprise market, along with content providers, carriers and governments.
"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, Level 3 CEO, said in a statement. "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."
Meanwhile, Global Crossing said the acquisition will create a networking powerhouse.
"The combined service capabilities, extensive network assets and talented employees of the two companies will create a stronger global communications competitor with compelling offerings in the marketplace," said John Legere, CEO of Global Crossing, in a statement.
Level 3's Global Crossing buy is a sign that the communications and networking markets will continue to consolidate. Last month, AT&T acquired wireless rival T-Mobile to build a communications titan. Other key service provider acquisitions include CenturyLink's recent purchase of Qwest.
According to Level 3, combined offerings will be available in the short term, as the integration between Level 3's and Global Crossing's respective assets will begin right away.
"We will begin integration planning immediately and bring an aggressive, disciplined approach to the process," Jeff Storey, Level 3 president and COO said in a statement. "After the closing, as we integrate the two operations and work to achieve our expected synergies, we will be dedicated to maintaining our focus on providing excellent customer service and growing our combined revenues."