The waiting is over: Qwest Communications has been sold to CenturyLink, itself a 'merger' of Sprint (News - Alert)'s former 'Local Telecommunications Division' and CenturyTel. The sale settles a question Qwest personnel found understandably uncomfortable: whether Qwest (News - Alert) was more like an independent telco, though a large one, than either AT&T or Verizon Communications.

That question now can be answered: Qwest turned out to be a company more like an independent telco than AT&T or Verizon. Of course, Qwest is in good company. Pacific Telesis, Ameritech and BellSouth (News - Alert) likewise were not the same as either AT&T or Verizon Communications, and were absorbed by what became the new AT&T.

The merger creates a new 'independent' telco of very-large scale, with 2009 revenues of nearly $20 billion. In some ways, the merger also recreates a 'Sprint'-style company with both local telephone assets and a major long-distance network.

Likewise, the merger puts the new CenturyLink into a new market space as a provider of services directly to enterprise and trans-national customers for the first time.

The all-stock transaction is expected to be immediately accretive to company cash flow.

Under the terms of the agreement, Qwest shareholders will receive 0.1664 CenturyLink shares for each share of Qwest common stock they own at closing.

Upon closing of the transaction, CenturyLink shareholders are expected to own approximately 50.5 percent and Qwest shareholders are expected to own approximately 49.5 percent of the combined company.

As of December 31, 2009, CenturyLink and Qwest served local markets in 37 states with approximately 5 million broadband customers, 17 million access lines, 1,415,000 video subscribers and 850,000 wireless consumers.

Nor would it seem CenturyLink is necessarily finished with its acquisitions. The combined company's pro forma net leverage would have been 2.2 times EBITDA for the 12 months ended December 31, 2009, including synergies on a full run-rate basis and excluding integration costs.

No new financing or refinancing is required as a result of this transaction and the combined company's capital structure and significant free cash flow generation are expected to support its ability to 'take advantage of opportunities that may arise,' the company says.

Each company plans to continue its current dividend policy until the close of the transaction.  Post closing, CenturyLink expects to continue its current dividend for shareholders of the combined company, subject to Board approval.  CenturyLink currently pays an annual dividend of $2.90 per share, which, on an as-converted basis, represents an approximately 50 percent dividend increase for Qwest shareholders.

The combined company's senior leadership team has CenturyLink clearly in control. Those executives include William A. Owens, chairman of the board; Glen F. Post, III, CEO and president; R. Stewart Ewing, Jr., CFO; Karen A. Puckett, COO and Christopher K. Ancell, president of business markets group. Only Ancell, who runs the business markets group at Qwest, is on that list, and clearly not in any of the 'C' title slots.

Based on the closing stock price of CenturyLink on April 21, 2010, the per share consideration to be received by Qwest shareholders would be equivalent to $6.02 of CenturyLink stock, which represents a premium to Qwest shareholders of approximately 15 percent over Qwest's closing stock price on April 21, 2010.  Based on the closing stock price of CenturyLink on April 21, 2010, the transaction reflects an enterprise value of Qwest of approximately $22.4 billion, including the assumption of $11.8 billion of Qwest net debt outstanding as of December 31, 2009.

Following the close of the transaction, the board of directors of CenturyLink will add four members from the current Qwest board, including Edward A. Mueller, Qwest's chairman and chief executive officer.

The corporate headquarters of the company will remain in Monroe, La.  The company also will maintain a key operational presence in Denver, including a regional headquarters, the Qwest Business Markets Group, as well as other functions to be determined.

In a consolidating wired service provider marketplace, the sale of Qwest long had been a foregone conclusion. The only issue was who would buy it.

But CenturyLink now stands alone. It is too large to be considered a tradtional rural independent local exchange carrier, but neither is it going to challenge AT&T or Verizon, either. Still, in a scale business that is expected to continue consolidating, heft is helpful.