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Shares of Frontier Communications tumbled 10% in trading after Verizon Communications revealed plans to acquire the fiber network company for $20 billion in cash. The deal, which will see Verizon pay $38.50 per share—a 44% premium over Frontier’s 90-day volume-weighted average—aims to significantly expand Verizon’s fiber network and enhance its competitive edge across more U.S. markets.
Verizon’s Chairman and CEO, Hans Vestberg, described the acquisition as a “strategic fit,” highlighting how it builds on Verizon’s two decades of fiber leadership. The company expects the deal to boost revenue and adjusted EBITDA growth once finalized.
The acquisition has been unanimously approved by the boards of both companies and is expected to close within the next 18 months, pending approval from Frontier’s shareholders and regulators. Despite the acquisition offer, Frontier’s stock surged 38% on Wednesday, closing at $38.68—slightly higher than Verizon’s offer price. Meanwhile, Verizon shares climbed 1% ahead of Thursday’s market opening, reflecting optimism surrounding the strategic move.
Currently as of 10:10 am the shares were trading 9.41% lower at $35.04