On Wednesday AT&T announced that it has entered into an agreement to acquire Lumen Technologies' residential fiber business for $5.75bn in cash. The acquisition is intended to strengthen the group's national presence in high-speed broadband, adding 1 million customers to its portfolio.
The announcement was well received by the markets, with Lumen's share price rising 13% in after-hours trading. The deal will enable AT&T to significantly expand its network in several major US cities, including Denver, Las Vegas, Minneapolis-St. Paul, Orlando, Phoenix, Portland, Salt Lake City, and Seattle.
Revealed by Reuters in December, the sale of this business is part of a strategy to refocus Lumen, which now wants to concentrate its efforts on fiber for businesses. Its CFO, Chris Stansbury, said the sale would enable the group to invest more in low-latency technologies, which are essential to support new uses related to artificial intelligence.
"Customers are asking us to move faster, particularly to meet their needs in a multi-cloud, AI-centric world," he said. The proceeds from the sale will be used to reduce Lumen's debt by $4.8bn, while reducing interest expenses by more than $300m per year.
The transaction is expected to close in the first half of 2026. Once the transaction is complete, the acquired assets, along with other capabilities, will be housed in a new AT&T subsidiary, in which the operator plans to sell a minority stake.
