The pending merger between Qwest Communications International Inc. and CenturyLink is the hot topic at Q.Marketplace 2011, the annual meeting for indirect sales agents who are part of Qwests Business Partner Program.
Chris Ancell, Qwests executive vice president of BMG, said the most common question his staff is getting from agents is, Whats going on with the merger?” Ancell and other Qwest executives offered some details on the Qwest-CenturyLink transaction, which was announced in April and is expected to close in the first half of this year. Once the transaction closes, Qwest will become a wholly owned subsidiary of CenturyLink.
Ancell told Q.Marketplace attendees that the merger is on track to be completed in the first half as planned. He said, from a regulatory standpoint, approvals from four states and the FCC remain, but are expected within 90 days. From an operations standpoint, the two companies have been talking and planning for integration, going so far as to decide what people will have what roles in the combined company. Those decisions have been made in most divisions through the first three tiers of management with layers four, five and, in some cases, six yet to go.
The CenturyLink approach, Ancell said, is to be completely ready to operate on day one.” He explained that all the planning will be done with execution remaining. This proactive approach is hoped to close the window of uncertainty for customers, employees and agents.
When the merger was announced, the companies said that Ancell, for one, would be keeping his job. This fall, the companies also shared that Qwests channel chief Blake Wetzel, vice president of sales for BMG, would be leading the combined channel.
One of the unanswered questions, however, is what brand will lead. Cindy Humphrey, vice president of marketing for BMG, said that the companies did not know yet and that her team is doing the groundwork for both potential outcomes. Regardless, she said, initially the two brands will be linked together in marketing efforts, so as not to lose any of the brand equity each has earned.
Stephanie Comfort, executive vice president and chief strategy officer for Qwest, said the acquisition was in large part about driving scale, but she also said each of the companies separately identified the same top three areas for growth: managed services/cloud services, video and wireless.
The executives also tried to paint a picture of the combined company.
Comfort said that together, Qwest and CenturyLink will have revenue of $18.68 billion. That compares to $11.68 billion for Qwest alone. In addition, the combined entity will have $8.4 billion in EBITDA (Qwest is $4.38 billion) and $3.4 billion in free cash flow (Qwest has $1.68 billion).
Ancell said BMG has been the growth engine for Qwest and will remain so with the combined company, which will be twice as big. He noted that revenue from businesses accounts for about half of Qwests revenue, and $2 billion of CenturyLinks, so a little more than a third of the combined company revenue.
The new company will have 48,000 employees, twice what Qwest has alone, and 184,000 route miles of fiber, Ancell said.