Lumen sells Mass Markets fiber-to-the-home business to AT&T for $5.75B

Lumen Technologies (LUMN) “announced it has entered into a definitive agreement to sell Lumen’s Mass Markets fiber-to-the-home business, including Quantum Fiber, in eleven states to AT&T (T) for a total of $5.75 billion in cash, subject to working capital and other various purchase price adjustments. The transaction marks another important, bold step in Lumen’s transformation into the leading enterprise digital networking company. AT&T’s acquisition includes approximately 95% of Quantum Fiber, approximately four million enablements, and nearly one million subscribers as of March 31, 2025. Based on first quarter 2025 results, these customers would generate over $750 million of annualized revenue. Lumen expects to build out new fiber enablements at a similar pace as 2024 through year end 2025. Importantly, Lumen will retain assets that will continue to serve as the foundation of its enterprise transformation, including all national, regional, state, and metro level fiber backbone network infrastructure, central offices and associated real estate. The enterprise and wholesale fiber customers will remain with Lumen in all geographies. In addition, Lumen will retain and care for its existing copper network, which primarily services consumer customers. Upon closing, Lumen intends to use the net proceeds of approximately $4.2 billion and cash on hand to pay down approximately $4.8 billion in superpriority debt, reducing our interest expense by approximately $300 million annually. Based on projected 2025 aEBITDA guidance, Lumen’s net debt to aEBITDA ratio will be reduced from 4.9x to 3.9x. The transaction is expected to reduce Lumen’s Mass Markets fiber-related capital expenditures by approximately $1 billion annually, enhancing cash flow and enabling Lumen to accelerate investments in the Company’s enterprise offerings and further strengthen the balance sheet. The transaction is expected to close in the first half of 2026, subject to any necessary approvals and closing conditions.”