Verizon gets $15 billion from wireline sale, tower leasing deal
Verizon Communications will make almost $15 billion from selling part of its wireline business and leasing thousands of wireless towers.
The largest U.S. cellphone carrier is selling its California, Florida and Texas wireline businesses, which serve phone, TV and Internet customers, to Frontier Communications Corp. for $9.9 billion in cash. Frontier is also taking on $600 million in debt.
Verizon says it wants to concentrate on the East Coast wireline business and will focus on expanding its FiOS broadband and high-speed Internet business in that region.
In 2010, Verizon sold Frontier 4 million phone lines in 14 states for $5.3 billion. Frontier said the newest deal is scheduled to close in the first half of 2016.
American Tower Corp. will pay $5.06 billion to lease 11,300 wireless towers and buy 165 towers. For the towers it is leasing, it will be able to operate them for an average term of 28 years, with an option to buy. The company expects to close the deal during the first half of 2015.
Verizon Communications Inc. said it plans to return some of the cash to shareholders with a $5 billion stock buyback. Its shares rose 1 percent to $48.35 in aftermarket trading.
Shares of Stamford, Connecticut-based Frontier Communications Corp. stock climbed 70 cents, or 9.9 percent, to $8.40. Shares of Boston-Based American Tower Corp. rose 12 cents to $99.71.
