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Jun. 26, 2009

CenturyTel expects to definetely close its acquisition of Embarq next Wednesday, following approval of the deal by the Federal Communications Commission.

The deal will create a new phone company with almost eight million landlines in 33 U.S. states, but mainly in rural areas.

Announced yesterday, the FCC's approval was the last regulatory approval that CenturyTel needed to officially close the deal.

CenturyTel said earlier this week that the company's new name will be CenturyLink. The company's stock will continue to trade under the symbol CTL.

In November 2008, CenturyTel announced that it was acquiring Embarq, the nation's fourth-largest traditional phone and landline company. Industry analysts said it was an indication of further and similar deals to come for other rural phone companies, which are suffering from line losses as consumers choose phone service from wireless or cable companies.

Besides providing phone service in rural areas and smaller cities in 18 U.S. states, Embarq is also the main phone company in Las Vegas. CenturyTel's service areas are mainly in the South and Midwest, in a swath from Louisiana to Minnesota.

Embarq also provides phone service in Colorado and the Northwest. Combined, the two companies will have about 8 million phone lines, 2 million broadband customers and about 400,000 video subscribers.

While the company will be based at CenturyTel's headquarters, Embarq shareholders will own 66.6 percent of the business.

Based on CenturyTel's June 24 close of $31.51, that's equivalent to $43.17 worth of CenturyTel stock for each Embarq shareholder.

In April, the acquisition was also approved by all 33 states in which the two companies operate.

CenturyTel Chief Executive Glen Post will hold the same position in the new company, with Tom Gerke, Embarq's CEO, as executive vice chairman.

The FCC's approval was the last hurdle the company needed in closing the deal.

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Source: CenturyTel.