Verizon Communications Inc. is in advanced talks to acquire rival telecommunications operator Frontier Communications Parent Inc., according to a person familiar with the negotiations.
Frontier Communications moved its corporate headquarters to Dallas last year from Norwalk, Conn., bringing administrative functions to Texas for a company with more than 14,100 employees in 25 states. Part of that move included up to $7 million in rebates on sales and use taxes for bringing jobs to the area.
An all-cash deal between the two companies could be announced as soon as Thursday, the person said, asking not to be named discussing non-public information. A representative for Frontier declined to comment. A spokesperson for Verizon didn’t immediately respond to a request for comment.
Verizon is headquartered in New York.
Frontier has 2.9 million customers in 25 states and had revenue of $5.75 billion in 2023 after adding 318,000 new fiber broadband customers during the year. Net income was $29 million.
Frontier bills itself as the “largest pure-play fiber provider in the US.” It reported sales of $2.9 billion in the first half of 2024.
Frontier’s market capitalization was about $7 billion going into Wednesday, but the company’s stock price shot up more than 36% after news of the potential acquisition broke, adding about $2.5 billion to the company’s value, according to Yahoo Finance.
With the corporate offices, Frontier is one of the largest publicly traded companies in North Texas, registering just outside the Fortune 500 at 586.
With demand for data usage expected to continue to grow, telecommunications providers have been bulking up their broadband offerings. In July, for example, T-Mobile US Inc. said it would invest $4.9 billion in a joint venture with private equity firm KKR & Co. to buy fiber-optic internet service provider Metronet.
Sowmyanarayan Sampath, the head of the Verizon’s consumer group, told investors at a Bank of America Corp. conference on Wednesday morning that the company had a 20-year history offering internet access over fiber-optic lines and would continue to build on that.
“We like the space and we think the business is good,” he said.
In 2015, Verizon sold parts of its landline phone business in California, Florida and Texas to Frontier for $10.54 billion in cash. Frontier later declared bankruptcy, emerging in 2021 with about $11 billion less debt.
Frontier initiated an internal review of its business earlier this year. The company has faced pressure from activist investor Jana Partners to improve its returns.
- Michelle F. Davis for Bloomberg
