Illinois-based Consolidated Communications Holdings Inc. announced Monday it has entered into a definitive agreement to acquire Charlotte-based FairPoint Communications Inc., another broadband communications provider, for $1.5 billion.

The deal will be completed via an all-stock transaction. The companies said the merger was “unanimously approved” by both boards of directors.

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

After the transaction closes, Udell will continue to serve as president and chief executive officer of the combined company, and one director from the FairPoint Board will join Consolidated’s board of directors.

The combined company will keep the Consolidated Communications name and will be headquartered in Mattoon, Illinois, a release said, and it will have its fiber network across 24 states.

Under the terms of the agreement, FairPoint shareholders will receive a fixed exchange ratio of 0.73 shares of Consolidated’s common stock for each share of FairPoint common stock. After the deal closes, Consolidated’s shareholders will own approximately 71.3 percent of the combined company, and FairPoint’s shareholders will own 28.7 percent, the press release said.

The companies added that this acquisition will strengthen the dividend payout ratio for shareholders and will improve the balance sheet through deleveraging.

The transaction is expected to generate “annual operating synergies” of approximately $55 million, the companies said, which are expected to be achieved within two years after completion of the merger. The deal is expected to close by mid-2017.

FairPoint’s shares were seen up 14.41 percent, to $19.45, in premarket trading. Shares of Consolidated closed on Friday at $28.38 and were seen trading up near 1 percent before the market opened on Monday.

Note: This story is from the North Carolina Business News Wire, a service of UNC-Chapel Hill’s School of Media and Journalism.