Dealmaking in North American telecoms is hitting its stride.
According to Bain’s figures, the first half of 2024 alone saw twice the dealmaking value in the US and Canada as in the entirety of 2023, although down from the highs of 2021 when $58bn of telecoms deals were done.
This has been driven by fibre consolidation, tower selloffs, and more – here are ten of the biggest mergers, acquisitions and disposals in the US and wider North American telco sector in 2024 so far.
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Verizon-Frontier acquisition
Announced: September 2024
Value: $20 billion
Status: Ongoing
The biggest telco M&A deal of 2024 so far is Verizon’s proposed $20bn acquisition of fibre provider Frontier Communications.
The deal brings Frontier’s 2.2 million fibre subscribers and 7.2 million locations across 25 states into Verizon’s customer base, taking overall Verizon coverage to over 25 million fibre passings and 10 million customers.
Like the Uniti-Windstream merger in the first half of 2024, this acquisition is not the first time the two participants have transacted – Verizon concluded a $10bn deal to sell its TV and internet business in California, Texas and Florida to Frontier in 2016. Following large-scale divestments in the 2010s, Verizon’s fibre network is now concentrated in the north-eastern US.
Meanwhile, this acquisition once again gives the company a fibre presence in many more states than it currently serves, albeit at a lower density than its heartlands (as the below map indicates).
Verizon tempted Frontier’s shareholders with an offer of $38.50 per share, representing a 37% premium on the closing price the day before the offer was made. The deal will involve Verizon refinancing Frontier’s $11.25bn debt pile.
Uniti-Windstream merger
Announced: May 2024
Value: $13.4 billion
Status: Awaiting regulatory clearance
The largest US telco M&A deal of the first half of 2024, accounting for over 60% of the entire H1 telco deal value in the US, represented something of a reunion.
Digital infra provider Uniti Group will merge with Windstream in a $13.4bn deal, bringing the two companies back together again nearly a decade after Windstream offloaded Uniti for $13.4bn to reduce its debt pile.
The tie-up leaves Uniti’s shareholders with 62% of the new company’s stock and Windstream with the remaining 38%. Uniti will fund the cash component of the deal with a blend of borrowing, operational cashflow and capital market transactions.
Operationally, the deal pairs Uniti’s wholesale fibre network with Windstream’s growing FTTH operation, serving 1.1 million customers primarily in the Midwest and Southeast – a partnership made easier by the fact that Windstream was Uniti’s largest wholesale fibre leasing customer prior to the merger.
According to its press release announcing the merger, Uniti expects to save $100 million per year on opex and up to $30 million on capex because of the deal.
T-Mobile’s USCellular acquisition
Announced: May 2024
Value: $4.4 billion
Status: in progress, various objections on antitrust grounds
T-Mobile has had a busy 2024 on the acquisition front, and its $4.4bn acquisition of most of the assets of US Cellular, the fourth-largest mobile operator in the US market, is one of several deals involving the carrier this year.
This deal allows T-Mobile to expand its services to the USCellular customer base, which is particularly strong in rural areas of the US, as well as giving these customers access to the rest of the T-Mobile US-based network.
This is not a full acquisition, however, with USCellular retaining use of most of its network infrastructure and tower portfolio and leasing the remainder to T-Mobile as part of the deal.
As of October 2024, preparations for the deal were underway, although there are objections from various quarters.
Six US senators sent a letter to the US Department of Justice in July 2024 protesting the deal, on the grounds that one of the top three carriers in the US acquiring the assets and customers of the fourth-largest carrier would lead to lower competition and higher prices.
As well as its M&A activity in 2024, including that of Mint Mobile in May, T-Mobile has form for similar acquisitions in the US market, with the carrier successfully buying and integrating Sprint in 2020 in a similar deal.
T-Mobile and KKR’s acquisition of Metronet
Announced: July 2024
Value: $4.9 billion
Status: awaiting regulatory approval
T-Mobile has spent 2024 investing in terrestrial as well as wireless infrastructure – joining with private equity firm KKR to spend $4.9 billion on 50% of the assets of fibre player Metronet and its broadband infrastructure.
The deal, structured as a 50-50 joint venture between the two purchasers, will see Metronet becoming a wholesale services provider for its retail customers.
At the time of acquisition, Metronet reached 2 million homes in the US, and the conclusion of the deal means there are plans are to grow this number to 6.5 million by 2030.
With T-Mobile taking responsibility for marketing and customer acquisition, this leaves the Metronet team free to focus on the technical aspects of network engineering and fibre buildout for the rest of the decade.
According to T-Mobile, Metronet will operate on a self-funding basis – that is, without capital injections from its new parent company – to reach this goal.
Both T-Mobile and KKR have been active in telco M&A this year. KKR’s long-running purchase of Telecom Italia’s fixed-line business finally completed in July 2024 for up to $22bn, facing down sturdy shareholder resistance and various approval rounds from various regulatory bodies.
T-Mobile and EQT acquire Lumos
Announced: April 2024
Value: $950 million
Status: Completed
The third major T-Mobile acquisition in the US in 2024, this deal involves a joint venture with infrastructure investor EQT to buy Lumos, a full fibre internet provider operating across three states in the mid-Atlantic region.
In a similar structure to its acquisition of Metronet, the deal sees Lumos move from a customer-facing broadband provider – delivering internet, voice, streaming and home Wi-Fi - to a wholesale fibre network focusing on increasing rollout and coverage.
The existing Lumos network totals 7,500 miles of fibre serving 320,000 premises, and T-Mobile is now the anchor tenant on this network. The aim is to grow the network to 3.5 million homes passed by 2028.
HPE acquisition of Juniper Networks
Announced: January 2024
Value: $14 billion
Status: subject to regulatory approval; expected to close early 2025
Capacity covered Hewlett Packard Enterprise (HPE)’s proposed $14 billion deal to buy Juniper Networks in its last roundup of global telco M&A activity, four months after the deal was announced. This would double the networking side of HPE’s business and allow it to tap into AI demand among telcos and enterprises on the enterprise networking side.
Juniper is considered to lead the market in this area, with analysts Forrester describing the company’s networking AI solutions at the time as ‘the most advanced solution on the market…no vendor has anything close to it.”
Since then, the paperwork required to complete the deal has gradually collected approval stamps, with competition and regulatory bodies in the UK, India and the EU all having approved the transaction by August 2024.
Meanwhile, there has been extensive analysis and some concern from the vendor community about what exactly this will mean for customers.
Cisco’s CFO Scott Herren told a conference audience in September that the tie-up is unsettling the enterprise networking market, and several analysts predict swift retirement of Juniper product lines and software systems once the deal closes.
Verizon leases 6,339 towers to Vertical Bridge
Announced: September 2024
Value: $3.3 billion
Status: Ongoing, expected to close by the end of 2024
Verizon has been active in both M&A directions in 2024 so far, announcing the lease of over 6,000 of its towers to infrastructure company Vertical Bridge for $3.3 billion.
The lease-and-operate agreement for the towers spans ten years, with an option to extend for up to 50 years.
Vertical Bridge, backed by DigitalBridge, is the largest privately-owned towerco in the US, and this deal is a substantial addition to the 11,000 towers the company currently operates.
As TowerXchange reported in September, there are not many towers in the US that are operated by carrier instead of towercos, so this deal represents a substantial shift in the US tower and digital infrastructure market.
Zayo’s European fibre business carveout
Announced: May 2024
Value: Undisclosed
Status: Ongoing
Zayo Europe was already a largely autonomous part of its parent business before May 2024, so the deal to officially carve it out and establish a separate company, announced in that month, was something of a formality.
This deal creates a new European fibre business operating across 8 countries and 600+ data centres on the continent.
Nokia’s Infinera acquisition
Announced: June 2024
Value: $2.3bn
Status: Approved by Infinera shareholders in October 2024, awaiting regulatory approval
This is a deal involving a US company on the selling side – NYSE-listed Nokia agreed in June 2024 to spend $2.3bn on optical networking provider Infinera, bolstering its networking infrastructure business.
The deal is one side of a strategic reset for the Finnish company, who offloaded subsea cable builders Alcatel Submarine Networks to the French state in the same week the Infinera deal was announced.
The offer was split into 70% cash and 30% stock, with Infinera shareholders able to decide how they wish to be compensated for their holding.
As of October 2024, the deal was progressing nicely – Infinera shareholders approved the deal in early October, and the tie-up now awaits various regulatory approvals.
Zayo and TPG Crown Castle acquisition
Reported: October 2024
Value: up to $10 billion
Status: reported
A reported one to finish this list – reports emerged in early October that according to sources, Zayo would combine with buyout specialist TPG to buy Crown Castle’s fibre and small cell wireless assets.
This would suit the future strategy of Crown Castle, who are focusing more on tower development than fibre rollout, as well as Zayo, who would add Crown Castle’s 90,000 miles of fibre to its existing 145,000-mile network.
