M&A Shocker: CenturyLink, Level 3 to Merge?

In what would be a monster deal with huge channel implications, CenturyLink and Level 3 Communications reportedly are in advanced talks to merge.

A deal could be announced in the coming weeks, the Wall Street Journal reported on Thursday, citing people “familiar with the matter.” Both companies’ stocks jumped when the news leaked.

CenturyLink spokesman Mark Molzen said, “We don’t comment on rumors or speculation.” Level 3 couldn’t be reached for comment.

In July, analysts were buzzing about possible M&A involving Level 3. Wells Fargo analyst Jennifer Fritzsche said she saw Level 3 as more of a near-term buyer than seller. No other M&A talk surfaced until Thursday.{ad}

CenturyLink offers network and data systems management, big-data analytics and IT consulting, and operates more than 55 data centers in North America, Europe and Asia. As America’s third-largest incumbent telco, the company provides broadband, voice, video, data and managed services over a 250,000-route-mile U.S. fiber network and a 300,000-route-mile international transport network.

Broomfield, Colorado-based Level 3 is a giant in its own right, providing local, national and global communications services to enterprise, government and carrier customers.

Both companies are set to report their third-quarter earnings next week. Also, last month, both companies confirmed layoffs. CenturyLink plans to reduce its workforce by 7-8 percent by mid-December, impacting roughly 3,000-3,400 people, while Level 3 is making more modest cuts, slashing its workforce by about 70 people as part of a reorganization.