Verizon to Acquire XO Communications' Fiber Business for $1.8 Billion

Verizon (VZ) has announced plans to acquire the fiber-optic network business of XO Communications (XO) for approximately $1.8 billion. Here are the details.

Dan Kobialka, Contributing writer

February 23, 2016

1 Min Read
Verizon VZ has announced plans to acquire the fiberoptic network business of XO Communications XO for approximately 18 billion
Verizon (VZ) has announced plans to acquire the fiber-optic network business of XO Communications (XO) for approximately $1.8 billion.

Verizon (VZ) has added a fiber-optic network business to its portfolio. 

The telecommunications giant has announced plans to acquire the fiber-optic network business of XO Communications (XO) for approximately $1.8 billion.

In addition, Verizon will simultaneously lease available XO wireless spectrum, with an option to buy that spectrum by year-end 2018.

So what does the acquisition mean for Verizon and XO?

The acquisition of XO’s fiber-optic network business provides Verizon with access to XO’s fiber-based IP and Ethernet networks and fiber facilities to help the company “continue to densify its cell network,” according to XO.

Verizon said it expects to receive several financial benefits from the transaction, including a step-up in the basis of the assets as well as operating and capital expense savings, and the net present value of the operational synergies between Verizon and XO is expected to be in excess of $1.5 billion.

Also, the transaction may help XO strengthen its business.

“This transaction will create a stronger provider of business broadband services for the customers of XO Communications,” Chris Ancell, XO’s CEO, said in a prepared statement.

Verizon noted the transaction is subject to customary regulatory approvals and is expected to close in the first half of 2017.

What are your thoughts on Verizon’s acquisition? Share your thoughts about this story in the Comments section below, via Twitter @dkobialka or email me at [email protected].

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About the Author(s)

Dan Kobialka

Contributing writer, Penton Technology

Dan Kobialka is a contributing writer for MSPmentor and Talkin' Cloud. In the past, he has produced content for numerous print and online publications, including the Boston Business Journal, Boston Herald and Dan holds a M.A. in Print and Multimedia Journalism from Emerson College and a B.A. in English from Bridgewater State College (now Bridgewater State University). In his free time, Kobialka enjoys jogging, traveling, playing sports, touring breweries and watching football (Go Patriots!).  

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