Key unions agree to back Qwest-CenturyLink merger

 

Minneapolis / St. Paul Business Journal

By Greg Avery

October 25, 2010

 

Two unions have agreed to support the Qwest-CenturyLink merger in exchange for pledges to preserve union membership levels and address other employment issues raised by the deal.

Denver-based Qwest Communications International Inc. (NYSE: Q) and Monroe, La.-based CenturyLink (NYSE: CTL), which is acquiring Qwest, agreed to several points with the Communications Workers of America and the International Brotherhood of Electrical Workers unions.

Those include:

• Keeping union membership, as a percentage of the overall workforce, within one percentage point of where it stands at the close of the deal for 30 months after the merger. About 44 percent of workers at the two companies are union members today.

• Keeping open all Qwest call centers staffed by union members until at least May 15, 2012, and beefing up severance packages for call center employees through Oct. 6, 2012.

The unions’ promises include:

• Supporting any grant or other funding application made by the merged company to pay for increased broadband network infrastructure.

• Quickly withdrawing their formal opposition to the merger filed with state regulators and the Federal Communications Commission.

The agreement also set out frameworks for discussions between the companies and unions about health care, bargaining agreement issues and other matters affected by the merger.

Qwest agreed in April to be acquired by CenturyLink in all-stock deal worth, at the time, $10.6 billion. Including the Qwest debt CenturyLink will assume, the deal is valued above $20 billion.

Qwest employs about 29,200 workers. It’s the main local phone company in 14 states, including Minnesota, and it has a national data network used by business and government customers.

The merger has primarily been opposed the unions and by business-to-business telecoms concerned that ability to serve customers will be hurt if there are problems combining Qwest and CenturyLink network operations.

CenturyLink CEO Glenn Post III, in a written statement, praised the agreement that removes union opposition to the deal.

“CenturyLink values our positive relationships with our employees and unions,” Post said. “We rely on each and every employee to deliver an exceptional communications experience to our customers, and we will continue to work toward meeting their evolving communications needs.”

CenturyLink — formerly CenturyTel — acquired Embarq, the former landline arm of Sprint, in 2009.

Merging with Qwest, a larger company, would create a 50,000-employee telecom with 5.2 billion broadband customers, 16.2 million access lines, 1.5 million video subscribers and operations in 33 states.

In their agreement with unions, the com€