Global Crossing Buys Frontier ( NN new customer)
NEW YORK (AP) -- Global Crossing Ltd. of Bermuda is buying the larger U.S.
telephone company Frontier Corp. (NYSE:FRO - news) for about $11.2 billion in stock
in the latest alliance in the telecommunications industry.
The deal announced today gives Global Crossing a foothold in the U.S. market where
Frontier competes with long-distance phone service providers like AT&T Corp.
(NYSE:T - news), MCI WorldCom Inc. and Sprint (NYSE:PCS - news)Corp.
Frontier also provides local phone service in its home market of Rochester, N.Y., as well in 31 other states and the District
of Columbia.
Together, the combined companies in 1999 would have revenue of more than $4 billion, a stock-market value of nearly
$30 billion and more than 8,500 employees.
Global Crossing has been building a fiber-optic communications network to carry voice and data traffic worldwide.
Together, the companies will connect 159 cities worldwide with more than 71,000 miles of fiber- optic cable.
Frontier had $2.6 billion in revenue last year and boasts over 8,000 employees. Global Crossing, based in Hamilton,
Bermuda, has about 200 employees and is on track to achieve $1 billion in revenue this year, according to The Wall Street
Journal, which first reported the deal.
The acquisition has been approved by the boards of both companies but is subject to approval by shareholders and
regulatory clearance. The deal is expected to close before October.
Global Crossing is headed by Robert Annunziata, a former top executive at AT&T who became its chief executive just a
few weeks ago. Annunziata built Teleport Communications Group before selling the local-exchange carrier to AT&T for
$12 billion in 1998.
Frontier's chief executive, Joseph P. Clayton, will become a vice chairman of Global Crossing.
Global Crossing is offering $62 a share in stock under certain conditions for each Frontier share, a 40 percent premium
over Frontier's closing price Tuesday of $44.62 1/2 on the New York Stock Exchange. Global Crossing shares fell $5.06
1/4 to $51.50 on Tuesday in Nasdaq Stock Market trading.
The offered price depends on shares of Global Crossing trading between $34.56 and $56.78. |
