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As FairPoint Fails, Frontier Investors Back Verizon Buy

All eyes will be on Frontier Communications Corp. (FTR) to see how it integrates the 4.8 million Verizon Communications landlines it’s buying, now that shareholders have voted to approve the $8.6 billion deal.

There’s speculation that Frontier could falter like its now-bankrupt peer, FairPoint Communications, because it’s taking on so much in terms of new assets, different operations and even people, in 14 states.

Frontier’s shareholders on Tuesday voted to complete the transaction, which was announced in May. Lawmakers, workers unions and other entities have been skeptical of the deal, however; they fear layoffs will come in the wake of the Verizon wireline takeover. They also are wary of Frontier mucking up back-office and other operations for customers, the very problems that led to FairPoint’s Chapter 11 filing this week.

Frontier, though, is talking up the positive aspects of the Verizon landline purchase.

“This acquisition will be transformational for Frontier, giving us greater scale, a balance sheet approaching investment grade, and a fantastic platform for growth,” Frontier Chairman and CEO Maggie Wilderotter said in a prepared statement.

“Our entire team is hard at work with their counterparts at Verizon to ensure a successful integration,” she added.

The deal is expected to close in the second quarter of 2010, once it gets all regulatory green lights and completes financing. Frontier then will become the largest rural service provider in the country.


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