Verizon To Sell $15.54 Bln In Assets In Two Deals; Sets $5 Bln Share Buyback

(RTTNews) - Telecom giant Verizon Communications, Inc. (VZ) agreed Thursday to sell some of its wireline and wireless assets in two deals valued at a total of about $15.54 billion. The proceed from the sales will enable Verizon to sharpen its strategic focus and invest in its networks as well as return significant value to its shareholders through a $5 billion accelerated share-repurchase program.

"Our long-standing strategy has been to consistently invest in our networks, improve our customers' experience, and develop new products and services while delivering profitable growth. These transactions will further strengthen Verizon's focus on extending our industry leadership position in our core markets and return significant value to our shareholders," Verizon Chairman and CEO Lowell McAdam said in a statement.

Verizon agreed to sell its local wireline business and related assets in the states of California, Florida and Texas to regional telecom firm Frontier Communications Corp. (FTR) for about $9.9 billion in cash, plus $600 million in assumed debt.

The deal is expected to be completed in the first half of 2016, with the transfer of assets and transition for customers and employees being seamless. About 11,000 Verizon employees are expected to continue employment with Frontier after the deal.

Frontier had earlier also purchased landline assets from Verizon in 2009-2010. At the end of fourth-quarter 2014, these operations in the three states served about 3.7 million voice connections and about 2.2 million high-speed data customers, including about 1.6 million FiOS Internet customers, and about 1.2 million FiOS Video customers.

Verizon noted that the deal does not include the services, offerings or assets of other Verizon businesses, such as Verizon Wireless and Verizon Enterprise Solutions.

Further, Verizon also agreed to lease the rights to over 11,300 of its company-owned wireless towers and the outright sale of about 165 Verizon towers to American Tower Corp. (AMT) for an initial upfront cash payment of about $5 billion. Verizon expects the deal to close by mid-2015.

During the average term of the lease rights of 28 years, American Tower will have full operating rights to and responsibilities for the towers. American Tower will have exclusive rights to lease and operate the over 11,300 Verizon cell towers.

Additionally, Verizon announced a $5 billion accelerated share-repurchase program, under which Verizon will repurchase $5 billion of its common stock and expects to receive an initial delivery of shares having a value of about $4.25 billion. Verizon said it is funding the share repurchase with cash on hand.

VZ closed Thursday's regular trading session at $47.86, up $0.06 or 0.13% on a volume of 18.76 million shares. The stock gained a further $0.51 or 1.07 in after-hours trading.