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THE US$34 billion merger between ST Telemedia's portfolio company, US Internet service provider Level 3 Communications, and CenturyLink will put the combined company in a better position to further invest in broadband infrastructure for small businesses and consumers.
The combined company will offer CenturyLink's larger enterprise customer base with Level 3's global footprint, said CenturyLink - one of the largest phone companies in the US - in a press release.
Said its CEO Glen Post: "The digital economy relies on broadband connectivity, and together with Level 3 we will have one of the most robust fibre network and high-speed data services companies in the world."
Level 3 president and CEO Jeff Storey said that the merger is a compelling transaction for its customers, shareholders and employees. "In addition to the substantial value delivered to shareholders, the combined company will be uniquely positioned to meet the evolving and global needs of enterprise customers," he said.
Under the agreement, Level 3 shareholders will receive US$26.5 per share in cash and 1.4286 CenturyLink shares for each Level 3 share. The latter implies a purchase price of US$66.50 per Level 3 share - a premium of about 42 per cent based on Level 3's closing share price of US$46.92 on Oct 26.
The deal is subject to regulatory approvals and is expected to close by the third quarter of this year.