Global Crossing and Frontier Announce $11.2 Billion Merger.HAMILTON, Bermuda & ROCHESTER, N.Y.--(BUSINESS WIRE)--March 17, 1999-- Accelerates Creation Of First Owned & Operated Global Internet Protocol-Based Network Global Crossing Ltd. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :GBLX GBLX Global Crossing Ltd. (stock symbol) ), the owner and operator of the world's first independent global fiber optic network, and Frontier Corporation (NYSE NYSE See: New York Stock Exchange :FRO), one of the country's leading providers of facilities-based integrated communications and Internet services, today announced that they have signed a definitive merger agreement for a transaction currently valued at approximately $11.2 billion based on yesterday's closing price of Global Crossing shares. The combination of the two companies will create the first owned and operated global Internet Protocol-based fiber optic network able to provide customers with integrated worldwide Internet, data, long distance, local telephone and conferencing services. Based on announced networks, the combination will have 71,000 route miles The number of miles that are spanned by a telecommunications network. It does not include combined wire mileage due to multiple wires or fibers within a single cable or by overlapping segments, just the total geographic distance between cities or other terminal points. , over 1 million fiber miles, and offer ultra-high bandwidth to 159 cities in 20 countries. It will offer global voice, web hosting Making a Web site available on the Internet. Many ISPs host a few personal Web pages for an individual at no additional cost above the monthly service fee, but the address is subordinate to the ISP; for example, www.friendlyisp.com/pat_smith. , private line, ATM and Internet services. Under the terms of the transaction, which has been unanimously approved by the boards of directors of both companies, Frontier shareholders will receive Global Crossing common shares valued at $62 per Frontier share, subject to certain "collar" provisions. Based on current market prices, the merged company will be approximately two-thirds owned by current Global Crossing shareholders and one-third owned by current Frontier shareholders. The transaction is expected to qualify as a tax free reorganization to the Frontier shareholders and is expected to be accounted for as a purchase. Upon closing, the transaction is expected to be immediately accretive to Global Crossing's operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. . On a pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma basis, the companies' combined current market value is nearly $30 billion, with combined annual sales in excess of $4 billion; earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
"Merging with Frontier will enable us to greatly accelerate our aggressive growth strategy," said Robert Annunziata, Chief Executive Officer of Global Crossing. "We will now have a strong U.S. infrastructure to complement the IP-based fiber network we are building in Europe, Japan, Mexico, and Central and South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. . These are two complementary companies with no overlap, and together we will be ideally positioned to meet the exploding demand for bandwidth to handle Internet, data, video and voice transmissions, and produce outstanding value for our customers, shareholders and employees. We will have many unique assets and capabilities, a compelling financial profile, outstanding combined management and an addressable Reachable. When something is addressable, it can be identified and manipulated independently of its surroundings. For example, screen pixels and RAM memory are addressable. Each of the screen's picture elements can be individually turned on and off, and each of the memory's bytes can be market totaling approximately $450 billion. Frontier's GlobalCenter Internet web hosting business is one of the jewels in Frontier's crown and we are committed to extending its services globally." "This merger creates a global IP powerhouse with unprecedented capacity and scope, and is a natural progression for Frontier's future," said Joseph P. Clayton, Frontier Chief Executive Officer. "By leveraging our combined network assets, integrated services In computer networking, IntServ or integrated services is an architecture that specifies the elements to guarantee quality of service (QoS) on networks. IntServ can for example be used to allow video and sound to reach the receiver without interruption. and support systems, the combined company will be in a unique position to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. the booming global Internet business." Clayton will become a Vice Chairman of Global Crossing. Rolla P. Huff, who has been named Frontier President and Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. , will become President and Chief Operating Officer of Global Crossing's North American operations North American operation Surgical oncology Radical surgery of a 'frozen pelvis', consisting of radical en bloc resection of the uterus and urinary bladder. See 'Frozen pelvis.'. Cf 'All-American' and 'South American' operations. . Four Frontier directors will join the Global Crossing Board of Directors. Frontier's local operations in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of State will continue to be managed out of Rochester, NY, and the transaction is expected to be transparent to Frontier's other local properties. Annunziata added, "Frontier will give us an up-and-running high-speed U.S. fiber network providing long distance and local connectivity, a wide range of data and Internet services and extensive sales and support capabilities. This will jump start Global Crossing into the next phase in our strategic development - fully integrated retail services, both business and residential, on a global basis in the years ahead." The transaction is subject to approval by shareholders of both companies, expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act The Hart-Scott-Rodino Antitrust Improvements Act of 1976 (Public Law 94-435, known commonly as the HSR Act) is a set of amendments to the antitrust laws of the United States, principally the Clayton Antitrust Act. The HSR Act was signed into law by President Gerald R. , Federal Communications Commission Federal Communications Commission (FCC), independent executive agency of the U.S. government established in 1934 to regulate interstate and foreign communications in the public interest. and other regulatory approvals, and customary closing conditions. It is expected that the transaction will be completed in the third quarter of 1999. The number of Global Crossing shares to be received by Frontier shareholders will be adjusted to produce a value of $62 per Frontier share, as long as Global Crossing shares trade within a range of $34.56 to $56.78 per share (the "collar") during a pricing period prior to closing. Outside the collar, Frontier shareholders will receive a fixed number of Global Crossing shares, 1.0919 shares at the top end of the collar and 1.7939 shares at the bottom of the collar. In connection with the transaction, Frontier has granted Global Crossing an option to acquire up to 19.9% of its outstanding shares at $62 per share as well as a break-up fee if the merger is terminated for certain reasons. Shareholders of Global Crossing representing more than a majority of the voting power of the Company have agreed to vote in favor of the merger. Merrill Lynch & Co., Salomon Smith Barney, Inc. and Chase Securities, Inc. served as financial advisers to Global Crossing, and Morgan Stanley Dean Witter served as financial adviser to Frontier. Skadden, Arps, Slate, Meagher & Flom served as legal adviser to Global Crossing and Simpson Thacher & Bartlett served as legal adviser to Frontier. About Frontier Frontier Corporation is one of the leading providers of integrated communications services -- including Internet, IP and data applications, long distance, and local telephone -- to business customers nationwide. Frontier's self-healing, optical network provides customers with faster transmission speeds, greater bandwidth capacity and unrivaled reliability. Frontier provides local phone service in 32 states and the District of Columbia District of Columbia, federal district (2000 pop. 572,059, a 5.7% decrease in population since the 1990 census), 69 sq mi (179 sq km), on the east bank of the Potomac River, coextensive with the city of Washington, D.C. (the capital of the United States). . About Global Crossing Global Crossing is building and operating the world's most advanced global fiber optic platform for data, voice, video and Internet transmissions. The Global Crossing network will span four continents and address 80 percent of the world's international traffic. Global Crossing's operations are headquartered in Hamilton, Bermuda, with holding company headquarters in Los Angeles, and offices in New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. ; Morristown, New Jersey Morristown is a town in Morris County, New Jersey, United States. As of the United States 2000 Census, the town population was 18,544. Its estimated population in 2004 was 18,842. It is the county seat of Morris CountyGR6. ; San Francisco; Miami; London; Amsterdam; and Buenos Aires. Statements made in this press release that state either companies' or managements' intentions, beliefs, expectations or predictions for the future are forward-looking statements. It is important to note that both companies' actual results could differ materially from those projected in such forward-looking statements. Information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time to time in each companies' filings with the U.S. Securities and Exchange Commission (SEC). Copies of these filings may be obtained by contacting either company or the SEC. GLOBAL CROSSING AND FRONTIER CORPORATION TO HOST CONFERENCE CALL Global Crossing Ltd. (NASDAQ:GBLX), the owner and operator of the world's first independent global fiber optic network, and Frontier Corporation (NYSE:FRO), one of the country's leading providers of integrated communications services, will host a dial-in conference call today, March 17, 1999, at 11:00 a.m. (EST EST electroshock therapy. EST abbr. electroshock therapy ) to discuss the proposed merger between the two companies. Individuals calling from the United States can access the call by dialing 1-888-564-1649 at 10:45 a.m. (EST). International callers should dial 415-904-7382. Questions will be limited to investors and analysts only. For those unable to participate on today's call, there will be a rebroadcast beginning at 1:00 p.m. (EST) today through Friday, March 19, at 6:00 p.m. (EST). Individuals calling from the United States can access the call by dialing 1-800-633-8284. International callers should dial 619-812-6440. All callers must enter reservation number: 11980990 to access the rebroadcast.
WHAT: Global Crossing and Frontier Corporation
Conference Call
WHO: Robert Annunziata, CEO, Global Crossing
Joseph P. Clayton, CEO, Frontier Corporation
WHEN: Wednesday, March 17, 1999
11:00 a.m. EST
CONFERENCE 1-888-564-1649
CALL NUMBER: 415-904-7382 for International callers
Dial-in by 10:45 a.m. EST
REBROADCAST: March 17, 1999 at 1:00 p.m. EST through
March 24, 1999 at Midnight EST
REBROADCAST 1-800-633-8284
CALL NUMBER: 619-812-6440 for International callers
Enter Reservation No.: 11980990
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