Level 3 to Buy Global Crossing in $3 Billion Deal

Level 3 Communications will buy Global Crossing in a transaction worth $3 billion.

The deal values Global Crossing at $23.04 a share — about 56 percent above the telecommunication company’s closing price on April 8. As part of the acquisition, Level 3 will also assume $1.1 billion of debt. The deal would combine the two companies’ fiber-optic networks over three continents, offering data and voice connections to more than 70 countries. The combined entity will create a company with revenue of $6.26 billion and earnings of $1.57 billion, after taking into account projected cost savings. Level 3 already has significant shareholder support. Singapore Technologies Telemedia, Global Crossing’s largest investor with a stake of about 60 percent, has agreed to vote in favor of the acquisition. Once the deal closes, ST Telemedia is to nominate directors to the board, relative to the size of its stake. Singapore Technologies Telemedia bought the stake in Global Crossing out of bankruptcy in 2003. Once a high-flying network operator, Global Crossing stumbled in the aftermath of the dot-com bust, filing for chapter 11 in early 2002.