Tuesday, January 16, 2007

Verizon sells off Northern New England wireline business for $2.7B

Through a newly-created subsidiary, Verizon Communications Inc. has sold its local exchange and related business assets in Maine, New Hampshire and Vermont in a deal worth $2.7 billion to Verizon stockholders, according to officials.

As part of the deal, Verizon created a separate entity for its assets in northern New England and promptly merged that unit with North Carolina-based FairPoint Communications Inc., which will now be responsible for the assets and services of Verizon's regional footprint.

Upon the closing of the transaction, Verizon stockholders will own approximately 60 percent of the new company. FairPoint stockholders will own approximately 40 percent. The new areas will be managed by FairPoint's executive team.

While Verizon stockholders will receive one share of FairPoint stock for approximately every 55 shares of Verizon stock held as of the record date, Verizon will not directly own any stock in the new entity.

Approximately 3,000 Verizon company employees -- those who support primarily the local phone business that is spun off -- will continue employment with FairPoint after the merger. Approximately 300 Verizon company employees in Maine, New Hampshire and Vermont who provide national or regional support services will remain with the Verizon company that employs them, officials said.

In addition, FairPoint executives say they expect to add approximately 600 positions to the employee base serving the three states.

The merger is expected to significantly increase broadband availability in the region within the first 12 months after the merger is completed, officials said.

Verizon's Maine, New Hampshire and Vermont properties serve approximately 1.5 million access lines, approximately 180,000 DSL customers and approximately 600,000 long-distance customers, as of Sept. 30, 2006.

FairPoint is a telecommunications provider with 31 local exchange companies in 18 states, serving customers in rural and small urban markets. FairPoint provides an array of services, including local and long-distance voice, data, Internet and broadband.