Verizon Communications has signed an agreement to purchase XO Communications' (XO) fiber-optic network business for approximately $1.8 billion from Carl Icahn who took over the company after a 2002 bankruptcy. The firm controls 20,000 miles of long-haul fiber routes and many more miles of short-haul lines that are used by corporations and other telecom companies to carry Internet data.
The transaction is expected to provide Verizon access to XO’s fiber-based IP and Ethernet networks, helping to better serve enterprise and wholesale customers. In addition, the acquired fiber facilities will help Verizon continue densifying its cell network.
Separately, Verizon will also simultaneously lease available XO wireless spectrum, with an option to buy that spectrum by year-end 2018. While Verizon and XO pursue requisite regulatory approvals from governmental agencies, XO will continue to operate independently.
Chris Ancell, chief executive officer of XO Communications
This transaction will create a stronger provider of business broadband services for the customers of XO Communications.
Carl C. Icahn, the Chairman and Sole Shareholder of XO Holdings
Although this sale to Verizon does not represent a significant annualized return on our investment, we believe that in today’s environment it does represent the best achievable outcome for the company’s customers, employees and owner.
