10:55 AM EDT, 09/30/2024 (MT Newswires) -- Verizon Communications ( VZ ) on Monday agreed to a $3.3 billion deal to give Vertical Bridge exclusive rights to lease, operate and manage thousands of its wireless communications towers across the US.

The transaction is structured as a prepaid lease with upfront proceeds of roughly $2.8 billion in cash, the companies said in a joint statement. Vertical Bridge, a private owner and operator of communications infrastructure and locations, will gain access to Verizon's 6,339 towers across all 50 states and Washington DC.

The deal is anticipated to be completed by the end of the year. The agreement, along with Verizon's existing joint venture with Vertical Bridge, is expected to support the company's aim to lower tower-related costs. Verizon's shares edged up 0.4% in Monday trading.

In 2023, Verizon and Vertical Bridge entered into an agreement to build cell towers across the US to expand Verizon's 4G and 5G ultra wideband services.

"We are well positioned with greater financial flexibility to invest in our business, return value to our shareholders and make the nation's best network even better for customers," Verizon Chief Executive Hans Vestberg said. "This transaction builds on our existing relationship with Vertical Bridge while realizing substantial value for this unique set of assets."

Under the terms of the latest deal, Verizon will enter into a 10-year agreement to lease back capacity on the towers from Vertical Bridge, with options to extend the term up to 50 years. Verizon will have access to certain additional space on the towers for future use, with some restrictions.

"This transaction not only solidifies our leadership in the tower space but also strategically positions us to capitalize on the growing demand for wireless infrastructure, especially as (artificial intelligence)-driven technologies and 5G continue to reshape connectivity needs across industries," according to Vertical Bridge Vice Chairman Marc Ganzi.

Vertical Bridge's majority owner, DigitalBridge, and shareholder CDPQ have committed capital to the firm to finance the transaction, the statement said.

Earlier in the month, Verizon agreed to acquire Frontier Communications Parent (FYBR) in an all-cash deal worth about $20 billion, as part of its efforts to boost its fiber network.

Price: 45.13, Change: +0.23, Percent Change: +0.52