Boston, MA 12/18/2013 (wallstreetpr) – American telecommunications major Frontier Communications Corp (NASDAQ:FTR) is set to acquire the consumer business divisions along with related assets located in the U.S. state of Connecticut from fellow industry player and behemoth AT&T Inc. (NYSE:T) in an all-cash deal worth $2 billion. The agreement, which could boost the dividends and annual savings for the fast-growing Frontier, will see it inheriting AT&T’s over 900K residential landline connections, around 4.15 million broadband and approximately 1.8 million U-verse video services users in the Connecticut state, supplemented by further subscriber bases comprising 1.7 million DSL broadband and roughly 2.45 million U-verse High Speed Internet customers. In addition, Frontier also gains the related network assets. Meanwhile, the liquid $2.0 billion will exchange hands for AT&T’s shareholding in its Southern New England Telephone Company (commonly known as SNET) and SNET America, Inc.
The Connecticut-based upcoming telecommunications player Frontier has its current communications business spread well across residential and business segments spanning 27 states in the U.S. The agreement, which is expected to be sealed in the latter half of 2014, currently awaits approvals by various U.S. regulators including the U.S. Department of Justice, the Federal Communications Commission (FCC) and the Connecticut Public Utilities Regulatory Authority, apart from various state authorities.
With the buyout from AT&T, Frontier will also get to capitalize on annually recurring savings worth around $200 million in addition to bolstering its net cash flow per share and dividend yields in the first year post the merger completion. Furthermore, notably owing to an upward sequential performance during the fiscal year 2013 and a few strengths seen in its recent third quarter earnings report, Frontier stocks have held their shareholder’ faith steady over their $4 mark, swaying very little, considering their past 90-day run on NASDAQ. Frontier Communications closed December 17 trading at $4.78 from its previous $4.44 close, with after-hours trading around $4.82.