Verizon to sell $15B in assets, launches $5B buyback

Verizon CEO Lowell C. McAdam speaks during a keynote address at the 2013 Consumer Electronics Show in Las Vegas.
David Paul Morris | Bloomberg | Getty Images
Verizon CEO Lowell C. McAdam speaks during a keynote address at the 2013 Consumer Electronics Show in Las Vegas.

Lightning struck twice at Verizon on Thursday evening as the telecom behemoth announced a $15.54 billion sale in assets in two separate transactions.

Verizon announced plans to sell its local wireline business in California, Texas and Florida to Frontier Communications for $10.54 billion, Verizon said. It will also sell the leasing and operating rights to 11,324 wireless communication towers to American Tower for about $5 billion. The Boston-based American Tower will also purchase 165 additional towers outright from Verizon in the transaction.

Verizon's stock rose about 1 percent in after-hours trading following the announcement, while Frontier's shares rose almost 4 percent. American Tower's stock also rose slightly after the bell.

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Verizon's deal with Frontier marks the second time in six years the two companies have done business together. Frontier bought 4.8 million rural phone lines from Verizon for $8.6 billion, according to a Reuters report. The New York City-based company also said it would buy back $5 billion in shares starting in this year's second quarter.

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Verizon said it expected the Frontier and American Tower transactions to be finalized by the first half of 2016 and by mid-2015, respectively. "The [Frontier] transaction includes Verizon's FiOS Internet and Video customers, switched and special access lines, as well as its high-speed Internet service and long-distance voice accounts in these three states," the company said. "Frontier will continue to provide video services in these states after the completion of the transaction."

"Our long-standing strategy has been to consistently invest in our networks, improve our customers' experience and develop new products and services while delivering profitable growth," Lowell McAdam, Verizon's CEO, said in a statement. "These transactions will further strengthen Verizon's focus on extending our industry leadership position in our core markets and return significant value to our shareholders."