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Mergers and Acquistions News

Categories: Telecoms

October 27th 2008, 17:15PM

Communications and high-speed internet provider CenturyTel has reached a definitive agreement with telecommunications specialist Embarq over a tax-free, stock-for-stock merger worth an estimated $11.6 billion (£7.52 billion).

The deal will see Embarq's investors receive 1.37 CenturyTel shares for each share of their Embarq common stock.

Based on the closing stock price for each company recorded on October 24th, that equates to a 36 per cent premium for Embarq shareholders.

Under the deal, CenturyTel will also assume around $5.8 billion of Embarq's debt, the company said.

Once complete, the merger will create one of the biggest telecommunications and high-speed internet firms in the US, with coverage in 33 states, eight million access lines and around two million broadband customers.

CenturyTel chairman and chief executive officer, Glen F Post III, said the deal represents a "significant win" for investors.

"We expect that bringing Embarq and CenturyTel together will accelerate both companies' strategic plans, diversify our revenues and provide us with the expanded networks, expertise and financial resources to build long-term value for shareholders," he commented.

CenturyTel recently posted third quarter net income of $82.8 million.
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