Terms of the deal have not been revealed. As of Thursday’s market close, Centurylink had a market cap of $16.93 billion and Level 3 had a market cap of $18.65 billion.
The combination of these two telecom firms could create some interesting strengths in virtualized networking.
Level 3 has been using software-defined networking (SDN) for its Ethernet services that it acquired two years ago when it purchased TW Telecom. The company purchased TW Telecom for about $6 billion in 2014.
CenturyLink, meanwhile, has set a goal of having its IP core network and data centers fully virtualized by 2018. The company so far has more than 50 percent of its IP core network and data centers virtualized today. In addition, the telco has built its network functions virtualization (NFV) platform in 36 network and data center locations with plans to expand into a total of 44 locations by the end of the year.
Both companies also have also been actively working on software-defined wide area networking (SD-WAN). Level 3 said earlier this year it was trialing SD-WAN and had about seven engineers working on the technology.
Both firms have been active in the acquisition arena over the past few years. Centurylink purchased Quest Communications for $11 billion and cloud provider Savvis for $2.5 billion in 2011. In addition, the company beefed up its SDN capabilities earlier this year with the purchase of certain software-based networking assets of the company formerly known as Active Broadband Networks. Financial terms of the deal were not disclosed.
Besides its TW Telecom purchase in 2014, Level 3 acquired Global Crossing for around $2 billion in 2011.