CenturyLink plans to acquire internet backbone company Level 3 Communications in a US$34 billion cash and stock deal that aims to consolidate the networks and customers of the two companies.

The combined company, operating in more than 60 countries, will be able to offer CenturyLink's larger enterprise customers the benefits of a larger global presence, and will also be positioned to further invest in the reach and speed of its broadband infrastructure for small businesses and consumers, the companies said.

CenturyLink is currently focused on global communications, hosting, cloud, and IT services, offering both network and data systems management with more than 55 data centers in North America, Europe, and Asia. It provides broadband, voice, video, data, and managed services over a 250,000-mile U.S. fiber network and a 300,000-mile international transport network.

"The digital economy relies on broadband connectivity, and together with Level 3 we will have one of the most robust fiber network and high-speed data services companies in the world," Glen Post, CenturyLink's CEO and president, said in a statement Monday.

The deal will boost CenturyLink's network by 200,000 route miles of fiber, which includes 64,000 miles in 350 metropolitan areas and 33,000 subsea miles connecting multiple continents, according to the companies.

The entire transaction includes the assumption of debt. After the transaction is completed, expected by the third quarter of 2017, CenturyLink shareholders will own around 51 percent of the combined company, which will be headquartered in Monroe, Louisiana, while Level 3 investors will own about 49 percent.

Post will continue as CEO of the company while Sunit Patel, chief financial officer of Level 3, will take an identical position in the new company. The chairman of the CenturyLink board at the time of closing of the transaction will continue as chairman of the new entity.

The new company aims to generate $975 million of annual cash synergies, mainly from the removal of duplicate functions, systems consolidation, and operational and capital efficiencies.