Verizon To Acquire Frontier In $20B Deal, Reaffirms FY24 Outlook
Portfolio Pulse from Lekha Gupta
Verizon Communications Inc. (NYSE:VZ) is set to acquire Frontier Communications Parent, Inc. (NASDAQ:FYBR) in a $20 billion all-cash deal, offering a 43.7% premium over Frontier's 90-day VWAP. The acquisition will enhance Verizon's fiber network and is expected to close in 18 months, pending approvals. Verizon reaffirms its FY24 outlook and anticipates $500 million in annual cost synergies. Frontier shares fell 9.72%, while Verizon shares rose 1.21%.
September 05, 2024 | 11:36 am
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NEGATIVE IMPACT
Frontier Communications shares dropped 9.72% after announcing a $20 billion acquisition by Verizon, offering a 43.7% premium over its 90-day VWAP.
The acquisition by Verizon at a significant premium suggests a positive long-term outlook for Frontier, but the immediate drop in share price reflects market reactions to the acquisition terms and potential uncertainties until the deal closes.
CONFIDENCE 100
IMPORTANCE 90
RELEVANCE 100
POSITIVE IMPACT
Investors can gain exposure to Verizon's acquisition of Frontier through the Invesco S&P 500 Equal Weight Communication Services ETF.
The ETF includes Verizon, and the acquisition could positively impact the ETF's performance due to Verizon's expected growth from the deal.
CONFIDENCE 80
IMPORTANCE 50
RELEVANCE 50
POSITIVE IMPACT
Verizon shares rose 1.21% following the announcement of its $20 billion acquisition of Frontier, expected to enhance its fiber network and generate $500 million in annual cost synergies.
The acquisition is seen as a strategic move to enhance Verizon's fiber network, which is expected to boost revenue and EBITDA growth. The market reacted positively, reflecting confidence in the deal's potential benefits.
CONFIDENCE 100
IMPORTANCE 85
RELEVANCE 100
POSITIVE IMPACT
Investors can gain exposure to Verizon's acquisition of Frontier through the SPDR S&P Telecom ETF.
The ETF includes Verizon, and the acquisition could positively impact the ETF's performance due to Verizon's expected growth from the deal.
CONFIDENCE 80
IMPORTANCE 50
RELEVANCE 50