Acquisition is latest in a string by Level 3 in aim to better compete against the big telephone companies.
Level 3, based in Broomfield, Colo., has agreed to pay approximately $744 million in cash and issue about 122 million shares of stock under the terms of the deal.
Broadwing makes about half its revenue by delivering data and telephony services to large companies. The other half of its revenue comes from its wholesale communications business that sells excess capacity to other carriers. Broadwing, based in Austin, Texas, was formerly the long-distance unit of Cincinnati Bell.
Level 3, which owns a nationwide Internet backbone, has been expanding its wholesale business and building its enterprise business with several acquisitions over the past year. Last year it bought competitor WilTel for $680 million in cash and stock.
Earlier this year it announced it would acquire TelCove in a deal valued at about $1 billion. The service provider also acquired regional provider Progressive Telecom for about $68.5 million in March and announced its plans to acquire ICG Communications for about $163 million in April.
Level 3 is bulking up its enterprise business to better compete against the big telephone companies Verizon Communications and AT&T (formerly SBC Communications), which, through their respective acquisitions last year of MCI and AT&T, also provide communications services to businesses.
"The acquisition of Broadwing is consistent with both the Level 3 wholesale market strategy as well as our more recent entry into the enterprise market," James Q. Crowe, chief executive of Level 3, said in a statement. "Broadwing has made great strides with national enterprise customers as a result of their strong product portfolio and national sales teams."