DENVER and McLEAN, VA - June 5, 1998 - Qwest Communications International Inc. and LCI International, Inc. today announced the merger between them has been completed and will be effective Friday, June 5, 1998, at 4:30 p.m. Eastern Daylight Time. The merger creates one of the industry?s leading multimedia communications companies with combined 1997 revenues of $2.3 billion, over two million business and residential customers, a total current equity market capitalization of approximately $11 billion, and the most advanced fiber optic network in the world.
Each outstanding share of LCI common stock will be exchanged for 1.1661 shares of Qwest common stock and cash in lieu of fractional shares. The exchange rate for each LCI share was determined by dividing $42 by $36.0178 - the average of the daily volume weighted average of trading prices for Qwest common stock for the 15 consecutive trading day period ending on June 4, 1998. In the transaction, Qwest will issue up to 129,788,000 shares in respect of LCI shares and options currently outstanding, or approximately 38 percent of the combined company?s shares (assuming all LCI options are exercised). The merger is intended to qualify as a tax-free reorganization and will be accounted for as a purchase.
?The combination of Qwest and LCI creates one of the fastest growing companies in America today. We are very pleased to consummate the merger with LCI in such a smooth and timely manner,? said Joseph P. Nacchio, president and CEO of Qwest. ?We have a top notch management team with extraordinary experience to lead the industry by combining the world-class attributes of the Qwest Macro CapacitySM Fiber Network with LCI?s sales and marketing expertise, distribution channels, and customer care and billing systems.?
Commenting on the completion of the deal, H. Brian Thompson, former LCI chairman and CEO who will now serve as Qwest?s new vice chairman said, ?We are very proud of what we have accomplished over the past seven years, as we have transformed LCI from a struggling company with minimal recognition, into a world-class organization and one of the most successful competitors in the long-distance industry. This merger will allow our combined companies to establish a whole new level of market presence, capabilities and position in serving customers in the global marketplace.?
This release may contain forward-looking statements that involve risks and uncertainties. These statements may differ materially from actual future events or results. Readers are referred to the documents filed by Qwest with the SEC, specifically the most recent reports on Form 10-Q, which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements, including potential fluctuations in quarterly results, dependence on new product development, rapid technological and market change, failure to complete the network on schedule, volatility of stock price, financial risk management and future growth subject to risks.
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