Qwest Communications Completes Merger With U S WEST,
Creating $85 Billion Broadband Internet Communications Competitor
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New Board of Directors Named; Company Added to S&P 500
DENVER, June 30 /PRNewswire/ -- Qwest Communications International Inc.
(NYSE:Q), the broadband Internet communications company, today completed its
merger with U S WEST, Inc. The companies closed the transaction in 49 weeks,
faster than any other large merger in the communications industry. Government
officials at the federal and state levels gave fast-track approval to the
merger, which is the first combination of old and new economy communications
companies.
The new Qwest will have an $85 billion market capitalization; expected pro
forma year 2000 revenue of $18.5 billion and pro forma year 2000 earnings
before interest, taxes, depreciation and amortization (EBITDA) of
$7.4 billion. The merger produces a company featuring Qwest's broadband
Internet data, video and voice communications capabilities with digital
subscriber line (DSL), wireless services and local communications services in
14 states.
"During the past three years Qwest has become one of the fastest growing
Internet communications companies in the world, solidifying Qwest's position
as the third-largest carrier of Internet traffic. The new Qwest will have the
scale, scope and growth characteristics to deliver more value for shareowners
and to continue to lead the industry in the delivery of innovative
applications and services," said Joseph P. Nacchio, who will continue to be
Qwest's chairman and CEO.
The new Qwest Board of Directors includes current Qwest board members
Philip F. Anschutz, Joseph P. Nacchio, Jordan L. Haines, Cannon Y. Harvey,
Vinod Khosla, Craig D. Slater, and W. Thomas Stephens. In addition, U S WEST
appointed Linda G. Alvarado, Craig R. Barrett, Hank Brown, George J. Harad,
Peter S. Hellman, Marilyn C. Nelson, and Frank Popoff.
Each U S WEST share will be exchanged for 1.72932 shares of Qwest common
stock. Qwest will issue approximately 882 million shares in exchange for
U S WEST shares currently outstanding, or approximately 53 percent of the
combined company's shares.
The all-stock transaction will be accounted for as a purchase and is
tax-free to U S WEST shareowners to the extent of the Qwest stock delivered in
the transaction. For accounting purposes only, U S WEST will be deemed the
acquirer and its assets and liabilities will be brought forward at net book
value.
Nacchio added, "Our new company will improve communication with elected
and appointed state and federal officials, be faster in responding to customer
service concerns, be stronger in the competitive marketplace, and continue to
develop cutting-edge, high-tech solutions for our customers."
The new Qwest is expected to have a compounded average annual revenue
growth rate of approximately 15-17 percent, and a compounded average annual
EBITDA growth rate of approximately 20 percent, for the period 2000 through
2005. Revenue synergies of $12 billion over a five-and one-half year period
are expected from the merger. Cost savings are estimated to be $4.4 billion
over the same five-and one-half year period.
Qwest will be added to the Standard and Poor's 500 list (S&P 500),
replacing U S WEST. Widely recognized around the world as the standard for
measuring large-cap U.S. stock market performance, the S&P 500 includes a
representative sample of leading companies in major U.S. industries. The move
to the S&P 500 further reflects Qwest's leadership position in the broadband
Internet communications marketplace and will help raise awareness with new
investors and customers.
Announced on July 18, 1999, the merger was approved by shareholders of
both companies on November 2, 1999. All federal and state regulatory
approvals were received prior to June 30, 2000. The combined company will
have 71,000 employees. Its headquarters will be at 1801 California Street in
downtown Denver. |
