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Verizon May Unload Enterprise Assets Worth $10B
Posted On Nov 10 2015
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Verizon Communications is considering a sale of its enterprise assets for as much as US$10 billion, according to a Reuters report on Friday.
Verizon’s $8.4 billion acquisition of MCI was completed in 2006 following a fierce bidding war with Qwest Communications, which is now part of CenturyLink.
The company wants to sell the former MCI business and the Verizon Cloud division, according to Reuters. No deal has been finalized yet and it is being said that the finalized buyer might have to sign commercial agreements with the company. It operates a global network and offers services in more than 140 countries.
Liana Baker and Greg Roumeliotis write Citigroup will help examine a potential sale of business landline and Internet services from Verizon’s unit formerly called MCI as well as data center offerings from its Terremark subsidiary.
A sale is not expected in the immediate future, since it will not be easy to separate out Verizon’s enterprise assets, the newswire’s sources said. However, there have been sudden changes to Century’s strategies and as of last week, the company is even considering sale of its data centers.
While AT&T has been trying to sell its data centre assets for a few time, Windstream Holdings sold its data centre business for $575m to TierPoint in October 2015. It acquired Terremark Worldwide Inc in 2011 for $1.4 billion. Verizon is still considering how a few of these asset sales could best be structured and no deal is imminent, the people added.
The company said in February that it would be selling its consumer wireless operations in California, Florida and Texas to Frontier Communications for $10.5 billion. Citigroup which has been advising America’s largest wireless carrier on the possible sale of the assets, has estimated its annual earnings before interest, taxes, depreciation and amortization at around $2bn.
The sources claimed that CenturyLink began discussions with Verizon about purchasing a few of its enterprise assets but could not agree on terms.
