Verizon in ‘advanced talks’ to acquire Frontier – report

Verizon is reportedly in “advanced talks” to acquire Frontier Communications, the telco that emerged from bankruptcy in the spring of 2021 and pursued a turnaround initiative that has largely hinged on a plan to upgrade about 10 million locations with fiber.

A deal could be announced this week, The Wall Street Journal (WSJ) reported Wednesday, noting that a deal for Frontier could give Verizon better competitive footing against AT&T, which has also embarked on its own fiber network-building initiative.

WSJ did not cite a possible price, but KeyBanc Capital Markets analyst Brandon Nispel estimated in a research note that the transaction could be worth around $18 billion.

New Street Research analyst Jonathan Chaplin said in a research note issued today that a Verizon-Frontier deal could draw counterbids from AT&T and T-Mobile, and that it might also accelerate an M&A wave for fiber assets among three national mobile carriers – AT&T, T-Mobile and Verizon.

Verizon and Frontier have been asked for comment on the WSJ report. Frontier shares jumped $10.59 (+37.77%) to $38.63 each in Wednesday afternoon trading. Verizon shares were down about 3.62%.

Word of a possible deal comes as Frontier undergoes a strategic review of its business that has included exploring potential partnerships, joint ventures, divestitures and mergers.

The WSJ report also arrives two months after a separate report that Frontier was in talks to form a joint venture with Stonepeak focused on supplying a capital injection of $500 million to $1 billion for use toward fiber investments.

Footprint includes former Verizon wireline assets

A Verizon play for Frontier wouldn’t lack irony. The current makeup of Frontier includes former Verizon wireline assets, including former fiber-powered Fios networks, in parts of California, Florida and Texas that Frontier acquired in 2016.

To read the complete article, visit Light Reading.