Three more states, and a district, have joined nine others in approving the merger of CenturyLink and Level 3 Communications.

The latest to give it the thumbs up were Delaware, Maryland, Hawaii and Washington, D.C., joining Georgia, Ohio, Utah, West Virginia, Texas, Connecticut, Indiana, Louisiana and Nevada.

The district may be OK with the merger, but regulators in D.C. are still vetting the deal.

CenturyLink filed merger proposal with the FCC and Justice in December. Just two weeks ago the FCC asked for more information from the companies about where they compete in the delivery of business broadband services. Such requests for additional data are not unusual, particularly in this case since the FCC is trying to come up with a list of competitive BDS counties as it preps a vote on deregulating Incumbent Local Exchange Carriers (ILECs), of which CenturyLink is one.

“These additional approvals show that regulators understand the CenturyLink-Level 3 merger will bring substantial service benefits to our customers, employees and communities,” said CenturyLink SVP John F. Jones of the latest state sign-offs. “The combined company will have a stronger and larger network that will help drive economic growth and connect consumers and businesses to the power of the digital world.”

The merger is valued at $34 billion including debt.

Along with the AT&T-Time Warner merger, it will be one of the first big media mergers to be vetted primarily under the Trump administration. Trump has talked about reducing regs, but also about blocking consolidation among media outlets.

Following rumors last week that a marriage was in the works, CenturyLink and Level 3 Communications announced Monday (Oct. 31) that they will merge in a deal valued at about $34 billion, including the assumption of debt.

Reports: CenturyLink Nears Level 3 Hookup

Under terms of the deal, Level 3 shareholders will receive $26.50 per share and a fixed exchange ratio of 1.4286 shares of CenturyLink stock for each Level 3 share they own. That, they said, implies a purchase price of $66.50 per Level 3 share (based on a CenturyLink $28.00 per share reference point), and a premium of about 42% based on Level 3’s closing share price of $46.92 on Oct. 26, 2016, the last trading day prior to speculation that a deal was in the works.

CenturyLink shareholders will own about 51% of the combined company, with Level 3 shareholders owning the balance.  They expect to close the deal by the end of third quarter 2017.

Among drivers of the deal, they said the combined scale will enable the companies company to deliver services  over a network that connects more than 350 metropolitan areas with about 75,000 on-net buildings. They expect the deal to achieve $975 million in annual run-rate cash synergies. 

They added that the deal will expand CenturyLink’s network by 200,000 route miles of fiber, noting that the additional on-net buildings include facilities in EMEA and Latin America. The combined company represents about $19 billion pro forma business revenue and $13 billion in “business strategic” revenue for the 12-month period ended June 30, 2016. About 76% of the combined company’s revenue will come from business customers. 

At close, Glen Post will continue to serve as CEO and president, while Sunit Patel, EVP and CFO of Level 3, will  serve as CFO of the combined company.  CenturyLink has also agreed to appoint four Level 3 Board members at closing, one of whom will be a representative of STT Crossing (a wholly owned subsidiary of ST Telemedia).

The combined company will be headquartered in Monroe, La., and keep a “significant presence” in Denver and other parts of Colorado, they said.

CenturyLink intends to finance the cash portion of the transaction and pay related fees and expenses through a combination of cash on hand at CenturyLink and Level 3, and approximately $7 billion of additional indebtedness.  CenturyLink has also received financing commitments from BofA Merrill Lynch and Morgan Stanley & Co. LLC totaling approximately $10.2 billion for new secured debt facilities, comprised of a new $2 billion secured revolving credit facility and approximately $8.2 billion of other secured debt facilities. 

"This transaction furthers our commitment to providing our customers with the network to improve their lives and strengthen their businesses,” Post said, in a statement. “It is this focus on providing fiber connectivity that will continue to distinguish CenturyLink from our competitors. CenturyLink shareholders will benefit from the significant synergies and financial flexibility provided by the combined company's revenue growth and strong cash flow. For employees, this combination will bring together two highly customer-focused organizations and provide employees growth and advancement opportunities the companies could not offer separately." 

“This is a compelling transaction for our customers, shareholders and employees," added Jeff Storey, president and CEO of Level 3. "In addition to the substantial value delivered to shareholders, the combined company will be uniquely positioned to meet the evolving and global needs of enterprise customers."

BofA Merrill Lynch and Morgan Stanley & Co. LLC acted as CenturyLink's financial advisors, and Evercore provided a fairness opinion. Wachtell, Lipton, Rosen & Katz and Jones Walker are acting as CenturyLink's legal advisors. Citigroup acted as financial advisor to Level 3, and Lazard provided a fairness opinion. Willkie Farr & Gallagher LLP acted as legal advisor to Level 3. Latham & Watkins acted as legal advisor and Credit Suisse acted as financial advisor to ST Telemedia.