Level 3 Communications acquires Genuity

After much speculation that Level 3 Communications Company would acquire bankrupt Internet infrastructure company, Genuity, Inc., Level 3 announced yesterday that it had completed its acquisition of Genuity. When Level 3 announced in November that it was in discussions to acquire Genuity, it was reported that Level 3 would pay Genuity $242 million in cash for the company and acquire some of Genuity's lucrative long-term business agreements. When the companies finally completed their negotiations, Level 3 announced that the acquisition had been completed for $60 million in cash, along with another $77 million in cash prepayments to vendors for services to be performed in 2003. Level 3 also also reported that it had reached agreements with Genuity's two largest customers, Verizon and America Online. Level 3 operates a worldwide fiber optic communications network and is based in Massachusetts. Level 3 said it plans to continue to operate Genuity as a separate business. entity

Level 3 reported that revenue for this fiscal quarter was $945 million, an increase from $326 million for the same quarterly period one year ago. Level 3's Chief Operating Officer indicated that there would likely be "significant declines in headcount," as a result of the acquisition, but declined to say how many or in what areas. Genuity currently employs 2,300, while Level 3 has 6,000 employees.