Under the deal, Level 3 shareholders will get $26.50 a share in cash and 1.4286 shares of CenturyLink for each Level 3 share they own.
When the deal is done, the combined company will be the No. 2 telecom vendor focused on the enterprise behind AT&T. CenturyLink has a large enterprise customer base and Level 3 adds a network that touches more than 60 countries.
About 76 percent of the combined company's revenue will be derived from business customers. Both companies have been built by acquisitions. CenturyLink acquired Embarq, Qwest, Savvis, AppFog, Tier 3, and Cognilytics. Level 3 acquired Genuity, Broadwing, Global Crossing, and TW Telecom, to name a few.
CenturyLink's business revenue base revolves around hosting, data services, data integration, and legacy services such as voice. Level 3 provides network services.
The plan behind CenturyLink's purchase is to use Level 3's infrastructure and network to offer more business services to large companies and extend into small and medium-sized businesses.
Glen Post, CEO of CenturyLink, will continue to lead the new company. Sunit Patel, CFO of Level 3, will be CFO of the combined company.