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Stocktwits - Telecom (BCBA:TECO2m) giant AT&T, Inc. (T) confirmed longstanding rumors and agreed to acquire Lumen Technologies, Inc.’s (LUMN) consumer fiber business for $5.75 billion in cash.
Lumen’s enterprise fiber business and consumer copper-based customers are not part of the agreement.
The transaction price was higher than the $5.5 billion price speculated in late March but lower than the $6 billion expected in December.
AT&T Chair and CEO John Stankey said, “This deal with Lumen represents a significant investment in U.S. connectivity infrastructure that will create jobs and spur economic activity in numerous regions and major metro areas across 11 states.”
The company hopes to double the availability of AT&T Fiber by the end of 2030.
Specifically, the company sees AT&T Fiber expanding into major metro areas like Denver, Las Vegas, Minneapolis-St. Paul, Orlando, Phoenix, Portland, Salt Lake City, and Seattle, as well as additional geographies.
AT&T said the mass-market fiber assets included in the deal totaled about 1 million fiber subscribers across more than 4 million fiber locations.
The telecom major plans to hold the acquired fiber network assets in a new, fully-owned subsidiary. After closing the deal, expected around in the first half of 2026, AT&T plans to sell partial ownership of the subsidiary to an equity partner that will co-invest in the ongoing business.
The deal comes amid the ongoing consolidation in the consumer fiber business. In September, AT&T’s peer Verizon Communications , Inc. (NYSE:VZ) announced a $20 billion deal to buy fiber internet provider Frontier Communications Parent, Inc. (FYBR).
Canadian telecommunications company BCE , Inc. (TSX:BCE) has agreed to buy Ziply Fiber, a fiber Internet provider in the U.S. Pacific Northwest, for a total transaction value of C$7 billion ($4.91 billion).
AT&T also said on Wednesday that it reiterated its full-year 2025 operational guidance and share repurchase plans.
“Paying $6B in cash for a part of Lumen is not what shareholders wanted... pay down the debt,” said one user on AT&T’s stream.
A bearish watcher berated AT&T for burning all its cash.
For Lumen, positive sentiment stemmed from retail investors’ relief at falling net debt. Others braced for a short-squeeze rally if the Lumen stock exceeded $5.
At the end of the first quarter, AT&T’s balance sheet showed $117.26 billion in long-term debt, while it was $17.33 billion for Lumen Tech.
By late Wednesday, sentiment toward Lumen stock was ‘extremely bullish’ (77/100), and the message volume on the stream was ‘high.’
LUMN sentiment and message volume as of 9:47 p.m. ET, May 21 | source: StocktwitsSentiment among retail investors on Stocktwits was ‘bearish’ (42/100) toward the AT&T stock, accompanied by ‘normal’ message volume.
T sentiment and message volume as of 9:47 p.m. ET, May 21 | source: StocktwitsFollowing the deal confirmation, AT&T stock rose 0.11% to $27.50, and Lumen Tech stock climbed 11.55% to $4.25.
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