The acquisition of Level 3 will vastly expand CenturyLink's fiber optics network and broadband businesses. Fred Katayama reports.
A mega marriage in business telecom services. Phone and Internet service provider CenturyLink is buying broadband services giant Level 3 Communications for $34 billion including debt. The move will vastly expand CenturyLink's network by giving it access to 200,000 miles of Level 3's fiber. The deal will also significantly expand CenturyLink's revenue from business customers, since companies make up the core of Level 3's clients in 60 countries. The deal comes as corporate clients seek more bandwidth to move data and run their businesses. An acquisitive company, CenturyLink gobbled up telecom carrier Qwest five years ago. J.P. Morgan analyst Philip Cusick said, "We believe the combination makes a lot of sense given the combination of Level 3's and CenturyLink's legacy Qwest national wireline business networks." Level 3 shares shot higher on news of the deal, adding on to their more than 10 percent gain on Thursday when Reuters reported the companies were in advanced merger talks. CenturyLink shares dropped. CenturyLink is paying a 42 percent premium. It expects to close the deal by late 2017.