Global Crossing merger approved
$9 million take-over bid approved.
The telecommunications company fought off rival companies to reach this far in the negotiations for the long distance communications and services company Frontier Corp.
Now the two-year-old group, which is building undersea and international fibre optic communications networks around the world, will have a foothold in the United States as well as the planned optical fibre network to link 170 cities in 24 countries worldwide to enable faster web access.
Its empire is also now expanding from just shore-to-shore provision of "dark'' or unused fibre to adding web services as a new feather to its cap.
On Friday the company was given the approval by the New York Public Service Commission to acquire Frontier and now hopes to complete the closing of the merger with the Rochester New York-based company within the next few weeks.
Two weeks ago Global had upped its bid for the company from $8 billion to fend off competition and secure the deal.
Global said at the time the amendment was designed to increase the certainty of the deal's closing and show management's commitment to the strategic merits of the deal.
Global was keen to acquire Frontier as part of its empire-building strategy and allow it to gain a foothold in the United States through the company's US fibre optic network and its local telephone operations.
The combined company's network will connect more than 160 of the largest business centres worldwide.
Global has also said on completion of the deal it would also buy back up to $500 million of Frontier's stock.
Global is currently ahead of its schedule in building parts of its network and now also plans to add web services to its ever-expanding business.
Besides the $6.4 billion trunk high-speed network the company will build on services already offered by Frontier and plans new city network rings.
"We are not looking for the last mile to residential subscribers, although we don't rule them out through partnerships,'' said co-founder David Lee. Lee went on to say that over the first three quarters of next year Global would start offering services to include Web hosting. Frontier's current clients include the portal Yahoo! Application services -- web-based services for companies seeking to out-source non-core activities -- global conferencing, and calling card and voice products would also be on offer.
Wim Huisman, Global Crossing president in Europe, said the group would also complete its ring running to Marseille in France by the end of the third quarter of 2000, a quarter ahead of schedule.
And in a fortnight the design for another ring to add Spain and Portugal to the list should be finalised and be ready for service by the end of the year 2000.
So far about 14,300 kilometres of the of Global's planned network of 175,000 km are in service.
Global is also collaborating with Microsoft Corp and Japanese internet firm Softbank Corp to build a $1.28 billion land and undersea telecommunications network in Asia.
The joint venture hopes to take advantage of the anticipated boom in internet use across Asia. The network, to be called the East Asia Crossing, will link Japan, China, Singapore, Hong Kong, Taiwan, South Korea, Malaysia and the Philippines.
GLOBAL CROSSING'S GROWTH Recent developments for Bermuda-based Global Crossing: September 17, 1999: New York Commission approves takeover of US telephone company Frontier.
September 16, 1999: Global Crossing establishes network centre in London Docklands.
September 15, 1999: Global Crossing acquires rights to to New York fibre market.
September 9, 1999: Global Crossing, Microsoft and Softbank establish joint venture to build Asian telecom network.
August 31, 1999: Global Crossing named as new company on Nasdaq-100.
August, 1999: South American network advanced.
July, 1999: Licences obtained for Pan European network.
July, 1999: Irish Government buys $80 million capacity; Global Crossing to build advanced undersea cable system for Ireland.
July 1, 1999: Global Crossing allows U S West to enter discussions with rival Qwest, ending takeover fight.
