Telecommunications firm Windstream is merging with EarthLink, the companies announced Monday, in an all-stock transaction valued at about $1.1 billion.
Under the terms of the agreement, EarthLink shareholders will get 0.818 shares of Windstream stock for each EarthLink share owned. Upon closing, Windstream shareholders will own about 51 percent of the combined company, while EarthLink shareholders will own 49 percent.
The deal should make Windstream more competitive in the intense telecom market, combining Windstream's scale in the enterprise segment with EarthLink's SD-WAN services. The acquisition will give Windstream a footprint of 145,000 fiber route miles, including key US routes in the Southeast and Northeast.
Additionally, the companies say they've identified more than $125 million in cost synergies they can achieve within three years of closing.
The deal follows CenturyLink's $34 billion purchase of Level 3.