In an all-cash transaction valued at USD 20 billion, Verizon will do a strategic acquisition of Frontier, the largest pure-play fiber internet provider in the US.
This will significantly expand Verizon's fiber footprint across the nation, accelerating the company’s delivery of premium mobility and broadband services to current and new customers, as well as expand Verizon's intelligent edge network for digital innovations like AI and IoT.
Verizon Chairman and CEO Hans Vestberg stated, “The acquisition of Frontier is a strategic fit. It will build on Verizon’s two decades of leadership at the forefront of fiber and is an opportunity to become more competitive in more markets throughout the United States, enhancing our ability to deliver premium offerings to millions more customers across a combined fiber network.”
The combination will integrate Frontier’s cutting-edge fiber network into Verizon's leading portfolio of fiber and wireless assets, including its best-in-class Fios offering.
Over four years, Frontier has invested over USD 4 billion in upgrading and expanding its fiber network, and now derives more than 50% of its revenue from fiber products.
“Less than four years ago, we set out an ambitious plan for Build Gigabit America, the digital infrastructure this country needs to thrive for generations to come,” said Nick Jeffery, President and CEO of Frontier. “Today’s announcement is recognition of our progress building a best-in-class fiber network and delivering reliable, high-speed broadband to millions of customers across the country. It’s also a vote of confidence for the future of fiber.”
During the latter half of 2023, Frontier, despite its strong standing in the fiber broadband sector, is claimed to be undervalued, urged to explore a sale. This acquisition confirms the investor interest’s speculation on Frontier’s future.
Customer and Strategic Benefits
Verizon's acquisition of Frontier will enhance its premium offerings by integrating Frontier's extensive consumer and small business fiber network with Verizon's Fios service, expanding choice and access to Verizon’s top-tier mobility, home internet, and business products.
This merger will also create a leading broadband network, combining Verizon’s and Frontier’s fiber networks to cover approximately 10 million customers across 31 states and Washington D.C., aiming to increase customer loyalty and reduce churn by offering combined mobile and home internet services.
The deal also allows Verizon to penetrate new markets, leveraging Frontier’s high-quality customer base and geographical presence, while aligning with Verizon’s long-term strategy to grow its nationwide broadband share and strengthen customer relationships.
Substantial Financial Benefits
The acquisition of Frontier is expected to boost Verizon’s earnings, contributing positively to its revenue and adjusted EBITDA growth rates.
Verizon anticipates realizing at least USD 500 million in cost synergies by the third year through increased scale, distribution, and network integration.
The transaction will also preserve Verizon’s financial strength, maintaining a reliable balance sheet and liquidity while upholding its capital allocation strategy, which includes prudent business investments, an industry-leading dividend, and ongoing debt reduction.
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