Level 3 pays $3B to acquire Global Crossing

Level 3 Communications Inc. is acquiring Global Crossing Ltd. in a tax-free, stock-for-stock transaction for approximately $3 billion, including the assumption of approximately $1.1 billion of debt.

The combined company will operate a unique global services platform anchored by fiber-optic networks on three continents connected by extensive undersea facilities, according to a joint news release dated today.

The combined network will serve a worldwide customer set with owned network in more than 50 countries and connections to more than 70 countries. The transaction will create a company with pro forma combined 2010 revenues of $6.26 billion and a unique capability to meet local, national and global customer requirements in a wide range of markets, the announcement states.

The new entity will offer enterprise, government, wholesale, content and Web-based customers a comprehensive portfolio of end-to-end data, video and voice solutions.

Under the terms and conditions of the agreement, Global Crossing shareholders will receive 16 shares of Level 3 common stock for each share of the Bermuda-based company's common or preferred stock.

Based on Level 3’s closing stock price April 8, the transaction is valued at $23.04 per Global Crossing common or preferred share, or approximately $3 billion.

“By leveraging the respective strengths and extensive reach of both companies, we are creating a highly efficient and more extensive global platform that is well-positioned to meet the local and international needs of our customers,” said Jim Crowe, CEO of Level 3, in the announcement. “We’re looking forward to welcoming Singapore Technologies Telemedia, Global Crossing’s largest shareholder, as a significant investor. They are exceptionally sophisticated managers, with holdings in telecommunications and information companies in a number of countries.”

“The combined service capabilities, extensive network assets and talented employees of the two companies will create a stronger global communications competitor with compelling offerings in the marketplace,” added John Legere, CEO of Global Crossing.