Monday’s $37 billion merger between U S WEST and Global Crossing Ltd. will create a competitor on the high-speed Internet access scene by giving 25 million customers in the United States access to high-speed Internet and other communications services.
The new company, to be called Global Crossing Corp., will be owned equally by current shareholders of Global Crossing and U S WEST. The new company will create two new “tracking” stocks to allow investors to choose between different business segments. Each U S WEST share will be exchanged for 1.2 shares of Class G or L Global Crossing stock. Each Global Crossing share will be exchanged for one share of either of the new classes.
US WEST will pay $62.75 a share for 39 milllion Global Crossing shares. That tender offer is expected to start over the next five days and be completed within a month.
The deal will make U S WEST the nation’s largest Digital Subscriber Line provider. The companies said the merger will create a new service provider with a state-of-the-art domestic and international backbone, high-speed data services which will be available to customers around the world and new electronic commerce opportunities.
“This merger brings together the first mile, the last mile and everything in between. It opens up a new world of advanced communications services to local customers around the globe. It combines all the elements necessary for building the data-centric telecommunications network of the future for both residential and commercial customers,” said Solomon Trujillo, U S WEST’s chairman, president and chief executive officer.
Global Crossing Chief Executive Robert Annunziata said the deal will give local customers in the United States and around the world access to a number of advanced Internet, data and voice offerings.
“The combination will create an aggressive, high-bandwidth communications carrier which will target telecom markets worldwide,” he said.
Annunziata and Trujillo will become co-chairmen and co-CEOs of the new company. A 22-member board will be created with 10 members designated by each company and two selected by mutual agreement.