On November 2, 2022, certain affiliates (collectively, “Sellers”) of Lumen Technologies, Inc. (the “Company”) entered into a Put Option Agreement (the “Put Option Agreement”) with Colt Technology Services Group Limited (“Purchaser”).
Under the Put Option Agreement, following completion of the consultation processes with the French works council of Sellers’ French affiliate and subject to certain terms and conditions, Purchaser has granted the Sellers an option (the “Option”) to require Purchaser to execute and deliver a definitive share purchase agreement (the “Purchase Agreement”) to acquire Sellers’ business (the “Divestiture”) conducted within Europe, the Middle East and Africa (“EMEA”) in exchange for US$1.8 billion, subject to working capital and other customary purchase price adjustments.
Under the Put Option Agreement, Sellers have granted Purchaser an exclusivity undertaking for a period of twelve (12) months. Once the Option has been exercised by Sellers it cannot be canceled or terminated by Purchaser (save for if the Sellers are in breach of the Put Option Agreement).
The Divestiture will be structured as the sale of Sellers’ EMEA subsidiaries (and certain related US assets), including the Sellers’ terrestrial and subsea networks (including transatlantic cables), data centers and network equipment in the region.
Purchaser has confirmed that it has access to financing in an amount sufficient to complete the Divestiture.
Upon consummating the Divestiture, affiliates of Purchaser and Sellers plan to enter into various commercial agreements designed to permit, among other things, the parties to continue to serve their respective customers.
The Divestiture is subject to customary closing conditions, including:
| | • | | receipt of authorizations required to be obtained from the U.S. Federal Communications Commission; |
| | • | | clearance of the Divestiture by the Committee on Foreign Investment in the United States; and |
| | • | | receipt of authorizations required to be obtained from, or notifications required to be furnished to, various other antitrust or other regulatory agencies with jurisdiction over the operations of the business being divested. |
The Purchase Agreement will provide that Sellers and Purchaser may mutually agree to terminate the Purchase Agreement before completing the Divestiture. In addition, the Purchase Agreement will terminate if the Divesture is not consummated on or before the first anniversary of the Put Option Agreement, subject to the right of either party to extend the Purchase Agreement in certain circumstances for up to an additional six months.
Under the Purchase Agreement, Sellers and Purchaser will agree to customary representations, warranties and covenants, including covenants (i) necessary to segregate Sellers’ divested business from the Company’s other retained businesses (including the Company’s continued right to sell its Company’s Content Delivery Network and Vyvx products in all markets) and (ii) with respect to conduct of the divested business prior to the consummation of the Divestiture. Sellers have also agreed to indemnify Purchaser for
certain pre-closing taxes,
litigation liabilities and other matters, and agreed to refrain from competing with Purchaser in certain respects in EMEA for a period of two years following completion of the Divestiture.
A copy of the Put Option Agreement is attached hereto as Exhibit 2.1 and incorporated herein by reference. The foregoing description of the Put Option Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Put Option Agreement.
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