Global Crossing Nears Deal to Sell Local Phone Business and Reorganize Operations

Strategic Insights -

Global Crossing, a leading telecommunications provider, is reportedly closing in on a deal to sell its local phone business to Citizens Communications for approximately $3.6 billion in cash. The company is also engaged in serious negotiations with Exodus Communications to sell its Web-hosting business, GlobalCenter Inc., for $6 billion to $7 billion in Exodus stock. The proposed transactions would mark a significant restructuring of Global Crossing under the leadership of new CEO Leo Hindery, who took the helm in March. The company has been actively acquiring telecom assets to build its undersea and land-based communications networks, including recent purchases in the UK and the US.

Key Takeaways:

  • Global Crossing is reportedly selling its local phone business to Citizens Communications for approximately $3.6 billion in cash.
  • The company is engaged in serious talks with Exodus Communications to sell its Web-hosting business, GlobalCenter Inc., for $6 billion to $7 billion in Exodus stock.
  • The proposed transactions would mark a significant restructuring of Global Crossing under the leadership of new CEO Leo Hindery.
  • Global Crossing has been actively acquiring telecom assets, including UK-based Racal Telecom, Global Marine Systems, and broadband-services provider Ixnet Inc., as well as US-based Frontier Corp. for $10 billion last year.
  • The company aims to shed two of Frontier's original businesses - local phone and Web-hosting - for the same price paid for all of Frontier, thereby gaining the lucrative long distance business and data network for next to nothing.
  • The proposed deals would be overseen by veteran deal maker Leo Hindery, who has vowed to oversee a strategic review of the company's assets.
  • Global Crossing's CEO Leo Hindery is known for his take-charge leadership style and experience as a veteran deal maker.

Statistics:

  • $3.6 billion: Approximate price tag for CITIZENS COMMUNICATIONS' purchase of Global Crossing's local phone business.
  • $6 billion - $7 billion: Approximate price tag for EXODUS COMMUNICATIONS' purchase of GlobalCenter Inc.'s Web-hosting business.
  • $10 billion: Approximate price tag for Global Crossing's acquisition of FRONTIER CORP. last year.
  • 2000: Year in which Global Crossing acquired Frontier Corp. for $10 billion.
  • 2000: Year in which Global Crossing named Leo Hindery as its new CEO.
  • March: Month in which Leo Hindery took over as CEO of Global Crossing.

Sources:

  • The Wall Street Journal
  • Newsbytes.com
  • http://www.newsbytes.com, 06:58 CST (20000712/WIRES ONLINE, TELECOM, BUSINESS/TELEMERGE/PHOTO)