Shareholders approve CenturyLink-Level 3 merger

Shareholders have given CenturyLink the green light to buy Level 3 Communications in a deal valued at around $32.5 billion.

96.3% of CenturyLink and 81.2% of Level 3’s shares voted in favour of the deal, which is set to be completed in September if approved by regulators.

The deal will add Level 3’s 200,000 mile fibre network to CenturyLink’s existing 250,000 route mile US network and 300,000 route mile international transport network.

"The combination of CenturyLink and Level 3 will significantly improve our global network capabilities, creating a company with one of the most robust fibre networks in the world," said Glen Post, chief executive officer and president of CenturyLink. 

"This expanded network should allow us to bring substantial operational and service benefits to our enterprise customers, as well as an enhanced customer experience."

The merger has already received a number of approvals from state regulators, including Georgia and West Virginia and clearances in Connecticut, Indiana and Louisiana. CenturyLink said it expects regulatory approval from remaining state, federal and international regulators in time to complete the deal by 30 September.

Upon closing of the transaction, Level 3 stockholders will receive $26.50 per share in cash and 1.4286 shares of CenturyLink stock for each Level 3 share they own. This means the value of the deal, reported as $34 billion when it was first announced in October, has fallen by around $1.5 billion.

Once the acquisition is closed, CenturyLink shareholders will hold around 51% of stock, while Level 3’s shareholders will take around 49% of the combined company, which will be headquartered in Monroe, Louisiana.

Post added: "We appreciate the strong support from our shareholders for the merger and their recognition of the benefits the combined company will bring. We're making solid progress with our regulatory approvals and remain optimistic that the process will continue smoothly with the remaining reviews.”

The approval comes just a week after CenturyLink CFO Stewart Ewing admitted CenturyLink is to likely to reduce its capital expenditure significantly thanks to synergies with Level 3.