CenturyTel Inc. (CT-Chart- News)says it expects to close its acquisition of Embarq Corp. (EQ- Chart - News)on July 1 following approval of the deal by the Federal Communications Commission creating a phone company with about 8 million lines spanning 33 states, mainly in rural areas.
The FCC action announced Thursday was the last needed regulatory approval.
CenturyTel, the Monroe-based telecommunications provider, said earlier that the company's new name will be CenturyLink. The company's stock will continue to trade under the symbol CTL.
CenturyTel announced last year it was buying Overland Park, Kan.-based Embarq, the nation's fourth-largest traditional telephone company. Analysts said it was a harbinger of further deals for rural phone companies, which are suffering from line losses as consumers choose phone service from wireless or cable companies.
The deal earlier was approved by all 33 states in which the two companies operate.
Apart from providing service in rural areas and smaller cities in 18 states from coast to coast, Embarq is also the main phone company in Las Vegas. CenturyTel's service areas are mainly in the South and Midwest, in a swath from Louisiana to Minnesota. It also provides service in Colorado and the Northwest. Combined, the companies will have 8 million telephone lines, 2 million broadband customers and about 400,000 video subscribers.
While the company will be based at CenturyTel's headquarters, Embarq shareholders will own two-thirds of the business. They are set to receive 1.37 CenturyTel shares for each share of Embarq stock they own.
Based on CenturyTel's Wednesday close of $31.51, that's equivalent to $43.17 worth of CenturyTel stock for each Embarq share owned.
CenturyTel shares closed up 65 cents at $32.16 in trading Thursday while Embarq shares finished up $1.06 to $44.08.
CenturyTel Chief Executive Glen Post will hold the same position in the new company, with Tom Gerke, Embarq's CEO, as executive vice chairman.
Disclosure I am long Both CTL and EQ shares.
Consumer-Goods Basic-Materials ETF'S Services Industrial-Goods Black Gold(OIL) Technology Bonds Links Financial Dividend-Increasers Emerging Markets Commodities HealthCare Inflation IRA Large Cap Shipping Utilities Cefs Small Caps Fees Monthly Dividend Reits Currency 8%+ Dividend Food Fixed Income Agricultural Precious metals Dividend Declared Insurance Earnings Miss Earnings Surprise Silver Insider Buying MLP'S Stock Splits 2 - 5% Dividend Tips For NEW Investors Banks Global etfs Aerospace Computers Index Funds Preferred Stocks New ETFS Ultrashort Etfs Asset Management Chemicals Hedged Etfs 5-8% Dividend Bio-Tech Build America Bonds ETN'S Investment Brokerage Semiconductors Steel Bad Picks Dividend Cut Mortgage Retail Special Dividend 10+++% Dividend 2 - 5% dividend Audio Podcasts Bankruptcy Diversified Investments Dividend Axed Equity Offering Natural Gas Office