As CenturyLink Inc. and Qwest Communications International Inc. shareholders mull whether to approve the carriers pending, $22 billion merger, the Federal Trade Commission (FTC) has given the combination the go-ahead.
Antitrust regulators said on Friday they see no competitive snags resulting from the transaction. CenturyLink and Qwest said on April 22 they would join forces in a $10.6 billion stock swap; CenturyLink also will assume $12 billion in Qwest debt. The deal should close in the first half of 2011.
The FTCs approval is just the first in a series of okays that must be obtained. CenturyLink and Qwest still need FCC and state officials thumbs-up. They also have settled on Aug. 24 as the day shareholders will vote on the merger; the meeting will be held in Denver, where Qwest is based. CenturyLink, the offspring of CenturyTel and Embarq, is headquartered in Monroe, La.
If all goes as planned, CenturyLink and Qwest will create a super-Tier 2 service provider stretching throughout 37 states. Together the operators will boast about 5 million broadband users and 17 million phone lines; CenturyLink also will become the third-largest carrier serving business markets, according to research firm ATLANTIC-ACM, holding a 7.6-percent share in the United States, behind AT&T Inc. and Verizon Communications Inc.
CenturyTel predicts it will run a lean operation; it plans to save $575 million in three to five years by cutting overhead costs, and duplicate jobs and systems, and another $50 million by chopping capital expenditures. To that point, only four senior-level Qwest executives will stay at the combined company: Stephanie Comfort, Steven Davis, Girish Varma and Chris Ancell all have positions secured.