Level 3’s deal with TW Telecom
Expected to be finalized by the end of the year, the acquisition of TW Telecom will further increase the size of Level 3, already among the largest providers of back-end Internet services. Level 3’s network of fiber optic cables is used by thousands of businesses, including tech giants such as Google and Netflix.
Statement from Level 3
“We believe this is a financially compelling and very strategic acquisition for Level 3 that will enhance our ability to continue to gain market share,” Jeff Storey, Level 3’s CEO, noted in a statement released earlier today. “The transaction further solidifies Level 3’s position as a premier global communications provider to the enterprise, government and carrier market, combining TW Telecom’s extensive local operations and assets in North America with Level 3’s global assets and capabilities.”
Level 3 also said it anticipates the acquisition will produce close to $240 million in overall cost savings, mainly from trimming network and operating expenses.
Lots of recent M&A activity in the telecom sector
A number of analysts have pointed out that the telecom industry has already seen several of the biggest deals so far this year. For example, just a couple of months ago, Comcast Corporation (NASDAQ:CMCSA) (NASDAQ:CMCSK) ponied up a premium price to acquire Time Warner Cable. Furthermore, AT&T is trying to acquire DIRECTV (NASDAQ:DTV) and Sprint Corporation (NYSE:S) and T-Mobile US Inc (NYSE:TMUS) are also seeking regulatory approval for a merger.