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Baby, if you've ever wondered what became of Cincinnati Bell... it is being bought by a Toronto conglomerate that has a penchant for telco assets.
Major Canadian infrastructure investment firm Brookfield announced it is buying Cincinnati Bell for $2.6 billion in a historic deal that is expected to close by the end of the year.
Cincinnati Bell currently owns and operates data transmission and distribution networks in Cincinnati, Ohio, and Hawaii, with a footprint of over 1.3 million homes, delivering broadband, video and voice services to residential and enterprise customers. Cincy Bell is presently undertaking a significant upgrade of its network to next-generation fiber that will support the increased demand for data and the coming of 5G. The carrier says its network upgrade is currently about 50% complete.
Cincinnati Bell itself is older than the telephone; the company was founded in 1873 as a telegraph company. It was a Bell System franchise for much of its history. In the 1990s, it expanded into cellphone and Internet services. It divested its mobile phone business in April 2014, selling off its wireless spectrum to Verizon, and focused on fiber optics.
The transaction price of $10.50 per share of Cincinnati Bell common stock represents a 36% premium to the closing per share price of $7.72 on December 20, 2019. The deal has received unanimous approval of Cincinnati Bell's board and the transaction is expected to close within the week.
Why this matters
Brookfield has already spent big money on telecoms infrastructure this year. The Canadian company invested $3.66 billion in Reliance Industries' telecom tower assets in July 2019, giving it infrastructure all over India. On December 20, Brookfield paid 3i £387 million for its stake in Edinburgh, Scotland-based telecom towers operator Wireless Infrastructure Group (WIG).
Brookfield says that it expects to continue spending on fiber and tower infrastructure soon as the market keeps growing.
"Data has been one of the fastest-growing commodities in the world, and we expect this rapid growth to persist for the foreseeable future driven by a number of factors including greater smartphone penetration, increasing data consumption, advent of 5G networks and other new and evolving uses such as Internet of Things, AI and other applications that depend on low latency," explained Brookfield CEO Sam Pollack on the company's first-quarter earnings transcript in in May.
Related posts:
AT&T Closes $1.1B Sale of Data Center Colocation Unit to Brookfield
Cincinnati Bell Preps for 1-Gig
— Dan Jones, Mobile Editor, Light Reading
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