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NEW YORK (AP) — Windstream is buying rival EarthLink for about $673 million in stock as internet service providers try to bulk up and cut costs with revenue under pressure.
Revenue at EarthLink, which reported earnings as well Monday, fell 13 percent in the third quarter.
Both companies provide internet service, cloud computing and other services. The combined company will keep the Windstream name and be based at its headquarters in Little Rock, Arkansas. EarthLink Holdings Corp. is based in Atlanta.
EarthLink shareholders will receive 0.818 of a share for each EarthLink stock they own. Windstream will issue about 93 million shares for the deal.
The companies value the deal, expected to close in the first half of next year, at $1.1 billion when debt is included.
Shares of Windstream Holdings Inc. rose 1.4 percent, to $7.34 in early trading. EarthLink Holdings Corp. fell 50 cents, or 8.1 percent, to $5.72.
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