Telecom company CenturyLink said on Monday it would buy Level 3 Communications in a cash-and-stock deal for equity value of $19.43 billion to expand its fiber optic network and high-speed data services.
CenturyLink (ctl) will offer $26.50 in cash and 1.4286 of its shares for each Level 3 share held.
Level 3's shares were up 3.9% at $56.15 in light premarket trading while CenturyLink's shares were unchanged.
The deal would combine Level 3's enterprise services with CenturyLink's network that provides internet and telephone offerings to millions of customers.
Including debt, the deal is valued at about $34 billion.
The deal, for about $66.50 per share, is at a premium of 42% from Level 3's Wednesday close. Reuters reported on Thursday that the companies were in advanced talks to merge.
The deal comes at a time when business clients of both companies seek more bandwidth and faster capabilities to move data to run their businesses.
This deal, expected to close by the end of the third quarter of 2017, will increase CenturyLink's network by 200,000 miles of fiber.
CenturyLink shareholders will own about 51% of the combined company and the rest by Level 3 (lvlt) shareholders.
Up to Friday's close, CenturyLink's shares had fallen nearly 21% this year while those of Level 3 were marginally lower.