Verizon
continues focus on network superiority with agreement to purchase
XO Communications' fiber business
NEW YORK, Feb. 22, 2016 -- In a move to continue to
strengthen the foundation of America's best networks, Verizon
Communications Inc. (NYSE, Nasdaq: VZ) today announced it has
signed an agreement to purchase XO Communications' fiber-optic
network business for approximately $1.8
billion.
Verizon's ownership of XO's fiber-based IP (Internet protocol)
and Ethernet networks will help better serve enterprise and
wholesale customers. In addition, acquired fiber facilities will
help Verizon continue to densify its cell network.
The transaction is subject to customary regulatory approvals and
is expected to close in the first half of 2017.
Verizon expects to receive several financial benefits from the
transaction, including a step-up in the basis of the assets as well
as operating and capital expense savings. The net present value of
the operational synergies is expected to be in excess of
$1.5 billion.
Separately, Verizon will simultaneously lease available XO
wireless spectrum, with an option to buy XO's entity that holds its
spectrum by year-end 2018.
Citigroup Global Markets Inc acted as financial adviser and
Debevoise & Plimpton LLP acted as legal adviser to Verizon.
Verizon Communications Inc. (NYSE, Nasdaq: VZ) employs a diverse
workforce of 177,700 and generated nearly $132 billion in 2015 revenues. Verizon operates
America's most reliable wireless network, with more than 112
million retail connections nationwide. Headquartered in
New York, the company also
provides communications and entertainment services over America's
most advanced fiber-optic network, and delivers integrated business
solutions to customers worldwide.
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Forward-looking statements
In this communication we have made forward-looking statements.
These statements are based on our estimates and assumptions and are
subject to risks and uncertainties. Forward-looking statements
include the information concerning our possible or assumed future
results of operations. Forward-looking statements also include
those preceded or followed by the words "anticipates," "believes,"
"estimates," "hopes" or similar expressions. For those statements,
we claim the protection of the safe harbor for forward-looking
statements contained in the Private Securities Litigation Reform
Act of 1995. The following important factors, along with those
discussed in our filings with the Securities and Exchange
Commission (the "SEC"), could affect future results and could cause
those results to differ materially from those expressed in the
forward-looking statements: adverse conditions in the U.S. and
international economies; the effects of competition in the markets
in which we operate; material changes in technology or technology
substitution; disruption of our key suppliers' provisioning of
products or services; changes in the regulatory environment in
which we operate, including any increase in restrictions on our
ability to operate our networks; breaches of network or information
technology security, natural disasters, terrorist attacks or acts
of war or significant litigation and any resulting financial impact
not covered by insurance; our high level of indebtedness; an
adverse change in the ratings afforded our debt securities by
nationally accredited ratings organizations or adverse conditions
in the credit markets affecting the cost, including interest rates,
and/or availability of further financing; material adverse changes
in labor matters, including labor negotiations, and any resulting
financial and/or operational impact; significant increases in
benefit plan costs or lower investment returns on plan assets;
changes in tax laws or treaties, or in their interpretation;
changes in accounting assumptions that regulatory agencies,
including the SEC, may require or that result from changes in the
accounting rules or their application, which could result in an
impact on earnings; and the inability to implement our business
strategies.
Media contact:
Bob Varettoni
908.559.6388
robert.a.varettoni@verizon.com
SOURCE Verizon