Yazılar

AT&T to Acquire Lumen’s Consumer Fiber Business for $5.75 Billion in Cash Deal

/in /tarafından

AT&T has agreed to purchase Lumen Technologies’ consumer fiber business for $5.75 billion, the companies announced Wednesday. The acquisition will give AT&T an additional 1 million fiber customers and bolster its national fiber footprint across several key metro areas.

The deal will significantly expand AT&T’s residential fiber coverage in markets including Denver, Las Vegas, Minneapolis-St. Paul, Orlando, Phoenix, Portland, Salt Lake City, and Seattle, according to an AT&T statement.

Lumen’s shares surged 13% in after-hours trading following the announcement.

Strategic Move for Both Companies

The acquisition:

  • Enhances AT&T’s residential broadband scale amid growing demand for high-speed fiber internet.

  • Allows Lumen to streamline its focus on its enterprise fiber business and invest more aggressively in low-latency infrastructure to support AI and multi-cloud environments.

“The customers are asking us to go faster, which is really to deliver their needs in a multi-cloud, AI-first world,” said Lumen CFO Chris Stansbury in an interview with Reuters.

Financial and Operational Impact

Lumen plans to:

  • Use $4.8 billion of the proceeds to reduce its debt burden.

  • Improve annual cash flow by over $300 million, largely by cutting interest expenses.

For AT&T, the newly acquired assets will be placed into a newly formed subsidiary, in which it plans to sell a minority stake, helping manage risk and capital requirements.

The transaction is expected to close in the first half of 2026, pending regulatory approvals.

Industry Context

The deal underscores the growing value of fiber internet infrastructure, as demand for high-speed, low-latency connectivity increases—particularly to support remote work, streaming, gaming, and AI-related data loads.

Reuters first reported in December that Lumen was exploring the sale of its consumer fiber business, which had been viewed as non-core to its future growth strategy.

Lumen Technologies Launches Sale of Consumer Fiber Unit to Cut Debt

/in /tarafından

Lumen Technologies (formerly CenturyLink) has begun the process of selling its consumer fiber operations, as part of a broader strategy to offload its legacy mass markets business and reduce its significant debt. The company, which provides high-speed internet services to residential customers, is pivoting towards growth in artificial intelligence while grappling with declining sales from its traditional services.

Strategic Shift

Lumen has enlisted Goldman Sachs to explore interest in its fiber business from potential buyers, including industry competitors. The company is also considering options such as selling a stake in the unit or entering a joint venture with a strategic partner. Talks are still in the early stages, and no deal has been confirmed. This move follows Lumen’s attempt earlier this year to explore options for its mass markets business, which houses the fiber operations. According to Lumen’s CFO, Chris Stansbury, the fiber business is valuable but may be better suited to a company with a wireless offering.

Potential Deal Valuation

The sale could involve splitting the consumer fiber unit from its enterprise fiber business, which provides internet services to large customers and will not be sold. The consumer fiber business, which serves 4.1 million fiber-enabled locations, could be valued at between $6 billion and $9 billion depending on the structure of the transaction.

Business Transformation

Lumen has undergone several transformations in recent years, including the $7.5 billion sale of local exchange carrier assets in 2021. To reverse its fortunes, Lumen has restructured its debt and focused on securing new contracts, including partnerships with major tech companies like Microsoft, Meta, Alphabet, and Amazon. These contracts are part of Lumen’s shift away from its traditional broadband and voice services, which have been under pressure due to outdated technology.

Financial Performance

Lumen’s efforts to diversify have been supported by a surge in contracts, including a $5 billion deal to provide AI connectivity to data centers. Despite these wins, the company continues to face challenges, as evidenced by an 11.5% drop in third-quarter revenue compared to the previous year. However, its fiber broadband business grew 16.6% in the same period. Lumen’s market value has risen significantly this year, reaching $6.2 billion, but the company still carries substantial long-term debt of $18.1 billion.