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Story Archives: REVISED--CenturyTel, EMBARQ merger to create fourth largest telco


REVISED--CenturyTel, EMBARQ merger to create fourth largest telco
by Michael DeVault - posted Wednesday, October 29th, 2008 @ 9:42 pmE-mail Story E-mail Story | Print Story Print Story 
Monroe will be the home of the fourth largest telephone service provider in the nation if regulators and stockholders approve a merger between CenturyTel and one of its largest competitors.

CenturyTel announced Monday it will merge with EMBARQ, a rural telephone provider with service in 22 states. EMBARQ is headquartered in Overland Park, Kan.

Gov. Bobby Jindal applauded the announcement. He said the merger would mean more higher paying jobs for a region—northeast Louisiana—in desperate need of economic development opportunities.

"Today CenturyTel announced an exciting new merger with EMBARQ," Jindal said. "If the transaction is successfully completed, Louisiana will have its third Fortune 500 Company by roughly June of next year."

Combined, the new company would have major presence in 33 states and provide service for more than 10 million customers.

CenturyTel Chairman Glen Post called the merger a victory for CenturyTel.

"This transaction is a significant win for the shareholders of CenturyTel and EMBARQ, as well as our respective employees, customers and the communities we serve," said Post. "EMBARQ has invested in building a base of high-quality assets positioned to create long-term value."

Under the terms of the deal, CenturyTel would issue 1.37 shares of CenturyTel stock for each share of EMBARQ. Also, CenturyTel will acquire $5.8 billion in debt from EMBARQ.

Included in the states to be serviced by the new company is Nevada, where EMRARQ holds a lucrative position as the primary telephone provider in Las Vegas.

EMBARQ Inc. was created when Sprint-Nextel spun off its wire line division in 2001. Since that time, EMBARQ has grown in its own right to a place in the Fortune 500.

The corporate headquarters for the new company will remain in Monroe. However, Post said the new company will maintain "a significant presence" in Overland Park.
Post currently serves as chairman of CenturyTel. Under the terms of the merger, he will assume the role of CEO, a post he held at CenturyTel until the death of founder Clarke Williams.

Current CenturyTel CEO Karen Puckett will remain with the new company as Chief Operating Officer.

Though EMBARQ shareholders will hold a two-thirds stake of the new company, CenturyTel will control the board of directors with eight seats to EMBARQ's six.

Also, EMBARQ's current chairman, William Owens, will remain non-executive chairman of the new board of directors.

"Shareholders and consumers alike should be excited by the potential benefits this combined company will bring to the marketplace," Owens said. "This merger will join together two industry leaders in their own right to create a dynamic new competitor in the communications industry."

CenturyTel said the merger should be completed by the end of the second quarter of 2009 and would begin producing a positive cash-flow for the new company in 2010.
The name of the new company has yet to be determined under the terms of the merger.

CenturyTel currently employees more 1,100 people in Monroe.
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