Verizon’s Deal To Buy Frontier Will Face Regulatory Challenges

Summary:

  • Frontier Communications is being acquired by Verizon for $38.50 per share in cash, expected to close in 18 months.
  • Frontier’s financials show marginal revenue growth but significant cash burn and debt, which Verizon will likely refinance at lower rates.
  • The merger offers long-term value by accelerating Frontier’s shift to fiber, but regulatory risks could impact the effort to combine the companies.
  • Frontier shareholders should consider selling near the deal price due to regulatory hurdles, while Verizon investors should be cautious of the 18-month timeline and risks.

Verizon office building in San Diego, CA, USA.

JHVEPhoto/iStock Editorial via Getty Images

Introduction

Frontier Communications (NASDAQ:FYBR) is a telecommunications company reinventing itself after restructuring during the pandemic. While I have not written about the company since its emergence from bankruptcy, I revisited Frontier’s situation earlier


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