Article 1 from The Wall Street Urinal
(BTW, i think the stock is going down short term)
Dow Jones Newswires -- March 17, 1999
Global Cross/Frontier Sees $1.2B In Synergies Over 10 Yrs
NEW YORK (Dow Jones)--Global Crossing Ltd.'s (GBLX) $11.2 billion acquisition of Frontier
Corp. (FRO) will result in $1.2 billion in cost-saving synergies over the next 10 years, company
officials said at a Merrill Lynch telecommunications conference Wednesday.
"We can address the whole world faster than anyone else can," said Robert Annunziata, chief
executive of Global Crossing, referring to what he said was a $450 billion world telecommunications
market.
Dan Cohrs, chief financial officer for Global Crossing, told Dow Jones the $1.2 billion in synergies
will come from Frontier's existing services and personnel. For example, Global Crossing can now rely
on Frontier's U.S. sales force and infrastructure rather than deploying its own, Cohrs said.
He added that the combined company will also enjoy certain U.S. tax benefits that were unavailable
to Global Crossing because it is a Bermuda-based company. Frontier is based in Rochester, N.Y.
"But we will still maintain our Bermuda tax status," said Cohrs, who noted that Bermuda offers certain
tax incentives to attract business.
Cohrs also said he expects the merger to close by the end of the year and that the combined
company will boast $4 billion in annual revenue and $1 billion in EBITDA.
Annunziata added at the Merrill Lynch conference that Global Crossing will continue to expand
Frontier's local phone business. Frontier's competitive local exchange carrier, or CLEC, operates in
32 states and Washington, D.C.
Global Crossing, which is building the world's first independent global fiber-optic network, agreed to
buy Frontier on Wednesday for $62 a share. The merged company will be two-thirds-owned by
Global Crossing. |
