Federal regulators have approved Inc.’s merger with Global Crossing, and the $3 billion deal is expected to close as soon as next week.
The U.S. Department of Justice approved the deal after reviewing it on antitrust grounds, and the Federal Communications Commission has authorized the transaction, too, Broomfield-based Level 3 announced Thursday afternoon.
“Overall, both companies are looking forward to completing the transaction and working toward creating what we believe will be a new kind of competitor that will offer customers the network reach, scale and reliability they are looking for, all from a team steeped in an entrepreneurial culture and singularly focused on the customer experience,” Jeff Storey, chief operating officer and president of Level 3, said in an email.
In April, Level 3 (Nasdaq: LVLT) reached agreement to buy Florham, N.J.-based Global Crossing (Nasdaq: GLBC) in a stock and debt-assumption deal.
Global Crossing shareholders will get 16 shares of Level 3 stock for each share of their stock. Level 3 will assume $1.1 billion in Global Crossing debt.
Both companies provide data-transport services and own large fiber-optic networks that carry Internet and corporate traffic (think MPLS networks).
The merged company will have fiber-optic networks in more than 50 countries across the Americas and Europe. The combined companies generated $6.26 billion in 2010 revenue.
Combining with Global Crossing will — after the companies wring about $300 million in near-term savings on operations — improve Level 3’s debt-to-cash-flow ratio, which should reduce its borrowing costs if it needs to refinance the combined company’s $7 billion in debt.
