Sources suggest Lumen Technologies, formerly known as CenturyLink, is considering selling its consumer operations in a number of US states

According to reports from Bloomberg, Apollo Global Management is in discussions to acquire a selection of consumer business assets from Lumen Technologies in a transaction that could be worth around $5 billion.

The target assets are, according to sources, situated in a number of US states, with a deal potentially set to be announced in the coming weeks.

This rumour, if proved true, would not come as too much of a surprise. In an earnings call in Q1 2021, Lumen’s CEO Jeff Storey said that the company was “actively looking at selling non-core assets to unlock value in our business”, with the company struggling financially in the wake of the coronavirus pandemic.

“We recognize with change coming for our customers, those are core assets driving growth and if it’s not core, we’re open and opportunities to talking about changes,” said Storey at the time.

Lumen’s entire business has been valued at around $15 billion. Consumer and small business broadband operations are part of the wider Mass Markets segment, which have revenues of around $1.4 billion this year, and represents around 29% of the group’s total revenue. The remainder of the revenue comes from the company’s business division, which has also been squeezed financially as the pandemic’s economic impact began to be felt by enterprises. 

The consumer and small business operations include both newer, fibre operations under the Quantum Fiber brand, as well as the older DSL networks under the CenturyLink brand. In total, the company’s fibre network spans around 724,000km globally, with customers 

This is not the first time Lumen has considered divesting of its consumer business. In 2019, the company initiated a strategic review of its consumer business, but this ultimately did not result in a deal being made. 

For investment firm Apollo, this would be the latest in a string of investments related to the telecoms sector. Earlier this year, the company paid Verizon $5 billion for Yahoo, AOL, and a number of other digital media properties, hoping to bolster the best assets of these companies’ portfolios and develop new revenue streams.

Even more recently, on Monday, the investment firm was rumoured to be in talks with struggling Indian telco Vi, potentially preparing to make a business-saving investment of $3 billion in exchange for a “sizable stake” in the company. Vi has been struggling financially in recent years after losing significant ground to rivals Reliance Jio and Bharti Airtel, as well as being slammed with extortionate annual gross revenue dues from the government and having spectrum licence payments due at the end of the year.


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