Verizon has agreed to buy XO Communications’ fibre-optic network business for USD 1.8 billion. The deal gives Verizon access to XO's fibre-based IP and Ethernet networks to serve business and wholesale customers as well as boost backhaul for its mobile network. In addition, Verizon will lease XO's wireless spectrum, with an option to buy that spectrum by the end of 2018. Pending regulatory approval, the companies expect to close the deal in the first half of 2017.
XO was saved from bankruptcy by Carl Icahn in 2003, and he is the sole shareholder of the parent company XO Holdings. Icahn said in a statement that while the sale to Verizon "does not represent a significant annualized return" on the investment in XO, "in today’s environment it does represent the best achievable outcome for the company’s customers, employees and owner".
The XO network covers 20,000 route miles interconnecting cities in the US and Canada, offering 100G speeds as well as extensive local coverage in 85 major metro markets. Over 2 million US business sites are connected to its Ethernet services.
