Windstream's $1.1 Billion EarthLink Buy Gets Regulatory Approval, Nears Completion

Combining the two service providers will create about 145,000 miles of fiber.

James Anderson, Senior News Editor

February 15, 2017

2 Min Read
Windstream-EarthLink logo

**Editor’s Note: Please click here for a recap of the biggest channel-impacting mergers in January.**

Windstream just took a major step in its $1.1 billion purchase of EarthLink.

The business communications giant announced Wednesday that all of the required federal and state agencies have approved the purchase.

Both companies plan to hold stockholder meetings on Feb. 24 to discuss the merger, which is anticipated to close before the end of the quarter.

The two service providers announced their plans to merge in November after rumors swirled about a potential deal and both companies reported decreased third-quarter earnings.

The acquisition faced and passed antitrust review from the Federal Trade Commission in January. The Federal Communications Commission also approved the deal. No parties voiced formal objection to the merger in the official FCC filing, and Windstream emphasized in the filing that the deal will help the public by providing a broader service portfolio and reaching more customers.{ad}

Telarus co-founders Adam Edwards and Patrick Oborn wrote that the merger will improve scale and lower costs for both companies. They noted that both companies’ channel chiefs have experience with M&A transitions, and that both channel programs have “mature rules of engagement” for partners.

“We trust the channel chiefs will take best practices from both organizations and use the opportunity to step away from inherited structures and traditions of the past,” Edwards and Oborn wrote. “We know they’re already in touch with the channel and have a good idea of what those changes must be and we look forward to speaking with them about and validating those ideas.”

They voiced several partner concerns, including the lack of choice for partners as a result of there being one less competitor, a tedious integration process and SMB rate hikes by Windstream that might clash with EarthLink’s strategy.

Andrew Pryfogle, senior vice president of cloud transformation for Intelisys, told Channel Partners last year that consolidation in the channel “is inevitable.”

“Forward-thinking sales partners need to make sure their revenue is in the safest harbor possible. … As with any merger, we anticipate short-term integration challenges; however, we’re excited about what the combined companies can accomplish,” he said.

Combining the two companies will create about 145,000 miles of fiber. Windstream joined EarthLink in investing in SD-WAN last month.

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About the Author(s)

James Anderson

Senior News Editor, Channel Futures

James Anderson is a news editor for Channel Futures. He interned with Informa while working toward his degree in journalism from Arizona State University, then joined the company after graduating. He writes about SD-WAN, telecom and cablecos, technology services distributors and carriers. He has served as a moderator for multiple panels at Channel Partners events.

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