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Qwest connects with LCI
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March 9, 1998: 8:04 a.m. ET
Telecoms team up to create the fourth-largest long-distance firm in U.S.
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NEW YORK (CNNfn) - Qwest Communications International Inc. and LCI International Inc. have connected in a $4.4 billion stock deal which will create the fourth-largest long distance phone company in the United States.
The merger, announced Monday, is part of a strategy by Qwest, a Denver-based start-up which has been building a fiber optic network for telecommunications, to take advantage of LCI's customer services, distribution channels and network platforms.
The combined companies had revenues of $2.3 billion last year. Together they will have a pool of 2 million business and residential customers.
Under terms of the agreement, each LCI stockholder will receive $42 in Qwest stock for each of their LCI shares. LCI shares (LCI) closed at 34-3/8 Friday while Qwest (QWST) ended trading at 36-1/2. Based on those prices, LCI shareholders will get about 122 million newly issued shares of Qwest stock, or 36.4 percent of Qwest's shares.
The merger is expected to be a tax-free transaction and the companies expect to have it finalized during the third quarter of 1998, assuming it receives shareholder and regulatory approvals.
Qwest plans to build a 16,285 mile fiber network serving the more than 125 cities that make up about 80 percent of the data and voice traffic in the country. Qwest began creating the network, expected for completion next year, because it anticipates an ever-greater demand for telecommunications network capacity.
LCI International, headquartered in McLean, Va., has a fiber optic network spanning 4,500 miles, which it hopes to expand to 8,500 miles by the end of the year. The company provides a variety of long-distance phone and data transmission services. 
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Qwest
LCI
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