Level 3 acquires Global Crossing for US$3bn in stock

11 Apr 2011

Data communications player Level 3 has acquired global transit firm Global Crossing for US$3bn in stock, it emerged today. Eircom owner Singapore Technologies Telemedia will be the largest shareholder in the combined business.

The acquisition will create a global data transit company with combined revenues of US$6.2bn and a network that reaches 70 countries worldwide.

Based on Level 3’s closing stock price on 8 April, the transaction is valued at US$23.04 per Global Crossing common or preferred share, or about US$3bn, including the assumption of about $1.1bn of net debt as of 31 December 2010.

Transformational combination

“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.”

Singapore Technologies Telemedia, which also owns Eircom, will remain a majority shareholder in the new enterprise.

“This transaction will provide Global Crossing shareholders with an attractive premium and significant participation in the upside potential of a leading communications company with industry-leading scale and capabilities,” said John Legere, chief executive officer of Global Crossing.

“The combined service capabilities, extensive network assets and talented employees of the two companies will create a stronger global communications competitor with compelling offerings in the marketplace,” Legere said.

“Each of our companies has a reputation for being nimble and flexible in meeting customers’ communications needs, and we expect that to continue – with the added benefit of offering customers significantly greater reach, products and services.”

“We’re looking forward to welcoming Singapore Technologies Telemedia, Global Crossing’s largest shareholder, as a significant investor,” said Crowe.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years