CenturyLink and Level 3 Communications are in negotiations about a potential merger, The Wall Street Journal reported, citing anonymous sources.
Broomfield, Colorado-based Level 3 operates one of the most extensive global internet backbones, and CenturyLink’s connectivity services, while global, are primarily concentrated in the US. Known primarily as carriers, both companies also have substantial carrier-neutral data center services businesses.
While CenturyLink, based in Monroe, Louisiana, has been exploring a potential sale of some or all of its global data center assets, the company’s management has repeatedly stated that while it is looking for an alternative to owning data center assets, it is not planning to get out of the business of providing data center space and services up the stack, which include various flavors of cloud, as well as managed hosting and security, among other services.
Level 3 has 350 colocation data centers around the world, while CenturyLink has about 60, according to the companies’ respective websites. The kernel of CenturyLink's current data center fleet is made up of assets it gained through the $2.5 billion acquisition of Savvis in 2011.
The talks are in progress and can still fall apart, the Journal noted. If finalized, however, a deal could be announced in the coming weeks.
Level 3’s market value is $16.8 billion, while CenturyLink’s is $15.2 billion.
In September, CenturyLink announced plans to cut its workforce by about 8 percent, or 3,400 people, to cut costs in response to a declining landline communications business.