Verizon Communications has agreed to acquire XO Communications’ fiber-optic network business for approximately $1.8 billion.
Verizon cited several financial benefits from the transaction, including a step-up in the basis of the assets as well as operating and capital expense savings. The net present value of the operational synergies is expected to be in excess of $1.5 billion.
Separately, Verizon will simultaneously lease available XO wireless spectrum, with an option to buy XO’s entity that holds its spectrum by year-end 2018.
Carl C. Icahn, the Chairman and Sole Shareholder of XO Holdings, stated “Although this sale to Verizon does not represent a significant annualized return on our investment, we believe that in today’s environment it does represent the best achievable outcome for the company’s customers, employees and owner.”
