US telecoms giant Verizon to buy smaller rival in $20bn cash deal

Verizon Communications announced Thursday an agreement to acquire smaller rival Frontier Communications in $20 billion transaction aimed at bolstering it high-speed fibre network in the United States.

The US telecoms giant will acquire Frontier for $38.50 per share in cash, representing a premium of 43.7%. The transaction has been unanimously approved by the Verizon and Frontier Boards of Directors.

The deal will extend Verizon's network reach to 25 million premises across 31 states and Washington, a Verizon statement said.

The transaction is expected to close in around 18 months, subject to approval by Frontier shareholders, receipt of certain regulatory approvals and other closing conditions.

Verizon expects to realize at least $500 million in annual run-rate cost synergies thanks to the benefits of increased scale and distribution and network integration.

Verizon noted that the acquisition of Frontier, which is the largest pure-play fibre internet provider in the US, will significantly expand its premium broadband and mobility services to more customers.