CenturyLink gets crucial green light for $34bn acquisition of Level 3
Operator is told, however, that it will have to divest Level 3 metro network assets and strands of dark fiber.
CenturyLink (NYSE: CTL) has been given an important clearance to go ahead with the $34bn acquisition of Level 3 Communications (NYSE: LVLT).
The thumbs up came from no one else than the US Department of Justice, which, however, warned the company that the deal is still subject to conditions outlined in a consent decree, including court approval of certain provisions.
The acquisition remains subject to regulatory approval from the Federal Communications Commission and the California Public Utilities Commission, along with other customary closing conditions.
The consent decree requires the combined company to divest Level 3 metro network assets in Albuquerque (NM), Boise (Idaho) and Tucson (Ariz).
In addition, CenturyLink will also have to divest 24 strands of dark fiber connecting 30 specified city-pairs across the country in the form of an Indefeasible Right of Use, a customary structure for such transactions.
The two companies said in a statement that these divestitures are not expected to have a material impact on the pro-forma operating revenue and operating cash flows of the combined company.
CenturyLink Senior Vice President for Public Policy and Government Relations John F. Jones, said: “We are pleased that the Department of Justice has conditionally cleared CenturyLink’s acquisition of Level 3. It is an important milestone in our overall approval process.
“We anticipate court approval of our agreed resolution with the Department of Justice as early as this week. We are focused on meeting our targeted transaction closing timeframe of mid-to-late October.”
The states of Alaska, Colorado, Delaware, Georgia, Hawaii, Maryland, Minnesota, Mississippi, New Jersey, New York, Ohio, Pennsylvania, Utah, Virginia, Washington, West Virginia and the District of Columbia have already approved the acquisition.
The transaction has also received regulatory clearance from Connecticut, Indiana, Louisiana, Montana, Nevada, Texas and Puerto Rico.