AT&T to Acquire Lumen's Fiber Business for $57.5 Billion

AT&T has agreed to acquire Lumen Technologies' consumer fiber business for $57.5 billion, expanding its high-speed broadband services in major cities such as Denver and Las Vegas. The deal, announced on Wednesday, involves AT&T paying Lumen in cash. The transaction is subject to regulatory approval and is expected to close in the first half of next year.

This acquisition aligns with AT&T's long-term goal of providing more households and businesses with access to its fiber network. The Dallas-based wireless and broadband company aims to reach 60 million locations by 2030, roughly double the number of locations currently served by AT&T Fiber. Lumen had previously indicated that its consumer fiber business did not align with its focus on serving enterprise clients. AT&T noted that Lumen has 1 million fiber users, covering over 4 million locations across 11 states in the U.S.

As part of the transaction, AT&T will establish a new subsidiary to hold the acquired assets. Post-closing, AT&T plans to sell a portion of the subsidiary's ownership to an equity partner, who will co-invest in the business. AT&T expects to identify the partner and complete the transaction within 6 to 12 months after closing the deal with Lumen. This structure is designed to support the expansion of AT&T Fiber beyond its traditional fixed-line telephone business. The company also reaffirmed its financial guidance for 2025. In 2022, AT&T announced a similar partnership with BlackRock, known as Gigapower LLC.

Fiber and telecommunications have become hotbeds for deals. Earlier this month, the Federal Communications Commission approved the sale of Frontier Communications to Verizon Communications Inc. Frontier had previously positioned itself as the "largest pure fiber internet company in the U.S." On May 16, Charter Communications Inc. agreed to a $34.5 billion cash and stock deal to merge with Cox Communications, which would combine the two largest cable TV providers in the U.S. Analysts at the time suggested that the merged company would become the largest broadband operator in the U.S., increasing Charter's user base by more than 20%.