Level 3 Communications (NASDAQ: LVLT) and Global Crossing Limited (NASDAQ: GLBC) reached an agreement that will see Level 3 acquire Global Crossing in a tax-free, stock-for-stock transaction.
This transaction will create a company with pro forma combined 2010 revenues of $6.26 billion.
According to the firms, Global Crossing shareholders will receive 16 shares of Level 3 common stock for each share of Global Crossing common stock or preferred stock that is owned at closing. Based on Level 3’s closing price at the end of last week, the transaction is valued at $23.04 per Global Crossing common or preferred share, or approximately $3 billion, including the assumption of approximately $1.1 billion of net debt as of Dec. 31, 2010.
“This is a transformational combination that we believe will deliver significant value to the investors, customers and employees of both Level 3 and Global Crossing, ” said Jim Crowe, chief executive officer of Level 3. “The complementary fit between the two companies’ networks, service portfolios and customers is compelling. By leveraging the respective strengths and extensive reach of both companies, we are creating a highly efficient and more extensive global platform that is well-positioned to meet the local and international needs of our customers.”