An AT&T logo is pictured in Pasadena, California, U.S., January 24, 2018. REUTERS/Mario Anzuoni
(Reuters) -AT&T has clinched a deal to acquire Lumen Technologies' consumer fiber operations for $5.75 billion in cash, the companies said on Wednesday, as the wireless provider adds further scale to its national fiber footprint.
Lumen's shares were up 13% in after-market trading on the sale of the business, which provides high-speed internet services to residential customers.
Buying the unit will gain AT&T 1 million fiber customers, as well as significantly expand its fiber-network operations in Denver, Las Vegas, Minneapolis-St. Paul, Orlando, Phoenix, Portland, Salt Lake City and Seattle, according to an AT&T statement.
Reuters first reported in December that Lumen was marketing the business for sale.
The deal allows Lumen to focus on growing the company's enterprise fiber business, Lumen Chief Financial Officer Chris Stansbury told Reuters.
It will also allow it to invest in low-latency technology, which is critical for supporting artificial intelligence workflows, he said.
"The customers are asking us to go faster, which is really to deliver their needs in a multi cloud, AI-first world,” Stansbury said.
The cash proceeds from the sale will help Lumen trim its debt pile by $4.8 billion and improve cash flow by reducing interest expenses by more than $300 million annually, he said.
The transaction is expected to close in the first half of 2026. AT&T said, once completed, the acquired assets and some other capabilities will be housed in a new subsidiary, in which it plans to sell a minority stake.
(Reporting by Milana Vinn in New York; Editing by Jamie Freed)
