AT&T announced on Wednesday it was acquiring virtually all of Lumen’s mass markets fiber business, in a $5.75 billion all-cash transaction that will help the telecom giant extend its reach to 60 million locations.
Lumen provides mass market broadband through the brands Quantum Fiber and CenturyLink.
The deal is pending approval from the Department of Justice, and is expected to close in the first half of 2026.
AT&T’s fiber network will expand to seven states — Washington, Oregon, Idaho, Utah, Colorado, Nebraska and Iowa — and grow in an additional four through the transaction.
Once the deal is consummated, the cellphone and internet provider will be able to reach 60 million fiber hubs by the end of 2030, it said.
“This deal with Lumen represents a significant investment in U.S. connectivity infrastructure that will create jobs and spur economic activity,” AT&T CEO John Stankey said in a statement.
”As we advance our fiber build, we’ll serve more communities with world-class connectivity and expect to roughly double where AT&T Fiber is available by the end of 2030,” he said.
Since spinning off WarnerMedia (which it bought as Time Warner in 2018) in 2022, AT&T has made significant investments as part of its strategic mission under Stankey. Since his hiring in 2020, the CEO has reoriented the company around broadband and cellular.
AT&T now touts itself as the largest fiber network in the U.S., and Lumen will expand that footprint even further. The planned acquisition includes about 1 million fiber subscribers across 4 million fiber locations, who will be transitioned to AT&T.
According to Lumen’s investor presentation, this represents over $750 million in estimated last quarter annualized revenue with 20% year-over-year growth.
Lumen will retain certain real estate and middle mile fiber assets. It will also provide transitional services and under agreements expected to last about two years after the deal closes.
The deal will help Lumen pay down a nearly $18 billion debt pile, according to its latest annual report.
“We are sharpening our focus on enterprise customers, and this transaction enhances our financial flexibility,” Kate Johnson, president and CEO of Lumen, said in a release.
“The fiber-to-the-home business being sold is tremendously valuable thanks to the incredible work by the team and will now have even greater opportunity to grow with AT&T’s scale, consumer-focus, and investment,” she said.
As part of the deal, the telecom giant will create a new, fully owned subsidiary called NetworkCo to hold the acquired fiber assets.
“It is expected that along with the fiber assets, certain employees will move, or receive offers to move, from Lumen to AT&T or NetworkCo as a part of this deal,” AT&T noted.
Once the deal closes, it then plans to partly sell off ownership in NetworkCo to an equity partner, a process that the company expects will take six to 12 months after the Lumen deal closes.
The deal is consistent with the financial plan and capital returns it outlined at AT&T’s Investor Day in December, and that it remains committed to previously announced stock buybacks.