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The deal stands to improve industry-wide pricing for long haul Internet services. Level 3 owns fiber-optic lines in the U.S. and Europe, while Global Crossing has assets in Latin America along with cables worldwide. The customer network formed from the combination of the two companies will serve more than 50 countries.
Under the terms of the deal, Global Crossing shareholders will receive 16 Level 3 shares for each common or preferred share they hold, equating to a Global Crossing evaluation of $23.04 per share.
The estimated cost savings the companies will experience from the merger will total $2.5 billion.
The deal is expected to close by the end of 2011, and add to free cash flow in 2013.