Verizon exploring $10 billion sale of enterprise assets
Verizon Communications Inc is exploring a sale of its enterprise assets which could be worth as much as $10 billion. The sale would include the business formerly known as MCI (acquired in 2006), which provides landline and Internet services for large business customers, as well as Terremark (acquired in 2011), its data center unit. The assets have estimated annual earnings of around $2 billion. The businesses have struggled to keep up with advances in cloud computing, and face fierce price competition from players such as Google and Amazon. Verizon is still considering how some of these asset sales could best be structured and no deal is imminent.
Wireline provider CenturyLink Inc was in talks with Verizon earlier this year to buy some of the assets but could not agree on terms. In a strategy shift, CenturyLink announced this week it would instead explore options for its data centers, including possibly selling them. The enterprise telecommunications industry has had to adapt in recent years to corporate customers seeking more sophisticated and cheaper offerings to manage their data. AT&T Inc has been exploring a sale of its data center assets for some time, while Windstream Holdings Inc sold its data center business for $575 million to TierPoint last month.
Verizon Chief Financial Officer Fran Shammo said, during the company's third-quarter earnings call on Oct. 20, that it continues "to work through secular and economic challenges" with its global enterprise division, which posted a 4.9 percent decline in revenue in the quarter ended Sept. 30. Verizon has been looking to sell other non-core assets as well. In February, it announced the sale of residential landline assets in California, Texas and Florida to Frontier Communications for $10.54 billion, and unloaded its tower portfolio for more than $5 billion.
http://www.reuters.com/article/2015/11/06/us-verizonenterprise-m-a-idUSKCN0SV2HE20151106
Wireline provider CenturyLink Inc was in talks with Verizon earlier this year to buy some of the assets but could not agree on terms. In a strategy shift, CenturyLink announced this week it would instead explore options for its data centers, including possibly selling them. The enterprise telecommunications industry has had to adapt in recent years to corporate customers seeking more sophisticated and cheaper offerings to manage their data. AT&T Inc has been exploring a sale of its data center assets for some time, while Windstream Holdings Inc sold its data center business for $575 million to TierPoint last month.
Verizon Chief Financial Officer Fran Shammo said, during the company's third-quarter earnings call on Oct. 20, that it continues "to work through secular and economic challenges" with its global enterprise division, which posted a 4.9 percent decline in revenue in the quarter ended Sept. 30. Verizon has been looking to sell other non-core assets as well. In February, it announced the sale of residential landline assets in California, Texas and Florida to Frontier Communications for $10.54 billion, and unloaded its tower portfolio for more than $5 billion.
http://www.reuters.com/article/2015/11/06/us-verizonenterprise-m-a-idUSKCN0SV2HE20151106