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