Lumen Selling ILEC Business in 20 States to Apollo Affiliates in $7.5B Deal

Lumen agreed to sell its incumbent LEC business in 20 states to Apollo Global Management for $7.5 billion including debt assumption, the telco announced about 4:30 p.m. EDT Tuesday. The carrier would retain its ILEC assets in 16 states, plus its national fiber routes and competitive LEC networks.

The transaction is expected to be completed in the second half of 2022, "subject to customary closing conditions including required regulatory approvals," Lumen said. Apollo separately said it expects completion next year.

"Our investment will help accelerate the upgrade to fiber optic technologies," said Aaron Sobel, Apollo private equity partner. He said executives are "ready to bring faster and more reliable internet service to many rural markets traditionally underserved by broadband providers." The investment company said NewCo will be led by industry veterans Bob Mudge, Chris Creager and Tom Maguire.

Lumen is "pleased with the attractive valuation we received," said CEO Jeff Storey. The company didn't immediately answer our questions. The FCC declined to comment.