CenturyLink Inc. completed its purchase of Qwest Communications International Inc. on Friday, combining the country's third- and fourth-largest land-line phone companies into one.
The combined company, which will be known as CenturyLink, offers land-line phone service in parts of 37 states, including Arizona.
The closing of the $12.2 billion stock deal was expected and follows nearly a year of regulatory reviews.
The consolidation is a response to steady cancellation of land lines as households chose to rely on cell phones or cable phone service. By buying up Qwest, CenturyLink will have a chance to cut corporate overhead.
The combined company will have about 15 million phone lines - including about 1.4 million in Arizona. The total lines are as many as Qwest alone had in 2005.
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Qwest began its troubled path as a long-haul fiber network in the telecom boom of the late '90s. Helped by its sky-high stock price, it bought "Baby Bell" U S West in 2000 and shed thousands of jobs. It then was ensnared in accounting troubles.
Qwest is the larger company, but its high debt load left it unable to play the consolidator in the industry. That role has instead been taken on by CenturyLink, which started as a small rural phone company. For the past decade, it's been buying mainly rural phone companies and lines, culminating in the acquisition of Embarq in 2009 and now the acquisition of Qwest.
The only larger land-line phone companies now are AT&T Inc. and Verizon Communications Inc.
CenturyLink is keeping its headquarters in Monroe, La. Qwest's Denver headquarters will turn into one of CenturyLink's six regional headquarters and will also be the overall headquarters for its business-services group. The other five regional headquarters will be in Phoenix, Minneapolis, Seattle, Wake Forest, N.C., and Apopka, Fla.
The combined company has about 47,000 employees, and some job cuts can expected from the combination. Both companies have been cutting jobs as they lose land-line customers.
BY the numbers
1.4 million
Phone lines CenturyLink serves in Arizona
450
Qwest employees in Southern Arizona at the end of 2010
3,140
Qwest employees in all of Arizona at the end of 2010
$232 million
Qwest's 2010 payroll in Arizona
NEw arizona execs
CenturyLink announced several management changes with the merger's completion:
• Guy Gunther was named CenturyLink vice president and general manager for the merged company's Arizona markets outside Phoenix. The 20-year telecom industry veteran will be based in Tucson.
Gunther spent the last nine years with Qwest, most recently in Denver as director of marketing strategy in the company's consumer-business unit.
• Ken McMahon was named vice president and general manager for the Phoenix market. He most recently served as CenturyLink vice president and general manager for northern Missouri.
• Qwest's former Arizona president, Jim Campbell, will serve in CenturyLink's Denver office as vice president of regulatory and legislative affairs for the company's Mountain Region.
Did you know
Qwest traces its roots to Mountain States Telephone & Telegraph Co., or Mountain Bell, a subsidiary of AT&T.
When AT&T was forced to divest its regional operating companies in 1984, Denver-based U S West was formed.
U S West comprised Mountain Bell, Northwestern Bell and Pacific Northwest Bell, serving 14 Western and Midwest states. Around 1991, the company finished consolidating operations under the U S West name.
Qwest Communications International Inc., which started out as a data-services provider, acquired U S West in 2000 in a hostile takeover.
Stock SWAP
The combined company adopts the name CenturyLink and its stock will continue to trade on the New York Stock Exchange under CenturyLink's current ticker symbol, CTL.
Qwest shares outstanding at the end of the business day Thursday were converted to CenturyLink shares Friday, at an exchange rate of 0.1664 of a share of CenturyLink for each share of Qwest.
Qwest shares closed Thursday at $6.83 per share. On Friday, CenturyLink closed at $41.03, down 52 cents. (CenturyLink will replace Qwest in the Arizona Daily Star's daily list of local and widely held stocks next week.)
Customer service
Customers will soon see Qwest materials rebranded as CenturyLink, but customer contacts including phone numbers and website (www.qwest.com) remain the same for now. The main customer-service line for Arizona is 1-800-491-0118.
Star Assistant Business Editor David Wichner contributed to this report.