Verizon Communications has confirmed plans to sell part of its wireline telephone and internet business to Frontier Communications for $10 billion. The deal covers Verizon’s consumer and business assets in California, Florida, and Texas.
Frontier will pay $9.9 billion in cash and assume another $600 million in debt. The deal is the largest ever for Frontier, though the proposal will require regulatory approval before it can be completed.
Verizon also agreed to sell the rights to more than 11,300 of its cell towers to American Tower for $5 billion. American will purchase 165 towers outright. Verizon will lease space on the towers for a period of at least 10 years.
Verizon is looking to strengthen its balance sheet after taking on debt to buy Vodafone’s stake of Verizon Wireless and to purchase $10.3 billion worth of spectrum in the recent AWS-3 auction. Verizon also plans to buy back about $5 billion in stock. Together, the deals announced today will net Verizon about $15 billion.
Verizon expects the tower sale to close during the second quarter of this year, but the asset sale to Frontier likely won’t close for a full calendar year.
