Consolidated Communications Holdings, Inc. said Monday it has entered into a definitive agreement to acquire FairPoint Communications, Inc., a business and broadband communications provider, in an all-stock merger transaction valued at approximately $1.5 billion, including debt. 

Under the terms of the agreement, FairPoint shareholders will receive a fixed exchange ratio of 0.7300 shares of Consolidated Communications common stock for each share of FairPoint common stock. 

After closing, Consolidated’s shareholders will own approximately 71.3 percent of the pro forma combined company and FairPoint’s shareholders will own 28.7 percent.

FairPoint, based in Charlotte, N.C., has operations in 17 states with the largest network in northern New England.  FairPoint operates a robust fiber network of approximately 21,000 fiber route miles. FairPoint has approximately 2,600 employees.

“This transaction combines two companies with extensive fiber networks and complementary strategies focusing on being the leading business and broadband solutions provider,” said Bob Udell, president and chief executive officer of Consolidated Communications in a prepared statement.

After the transaction closes, Bob Udell will continue to serve as president and chief executive officer of the combined company and one director from the FairPoint Board will join the Consolidated Communications Board of Directors. 

The combined company will retain the Consolidated Communications name and will be headquartered in Mattoon, Ill.     

The agreement and the proposed merger have been unanimously approved by the boards of directors at both companies.