NEW YORK (Bloomberg) Bermuda-based telecommunications firm Global Crossing Ltd agreed to be sold to Level 3 Communications Inc for nearly $2 billion.Level 3, an unprofitable provider of broadband services, jumped the most in almost two years after agreeing the deal.Level 3, based in Broomfield, Colorado, will acquire Global Crossing in an all-stock transaction to expand its network over three continents and reduce expenses, the companies said in a statement yesterday. The deal is worth $23.04 a share based on Level 3’s closing stock price on April 8, 56 percent more than Global Crossing’s share price that day. Jim Crowe, Level 3’s chief executive officer, will lead the merged entity.The deal will combine two unprofitable companies with total revenue of $6.26 billion as of last year, and cut annualised capital spending by about $40 million, according to the statement. It will also help reduce the pressure on prices, which have declined by as much as 30 percent a year in the industry, said Donna Jaegers, an analyst at DA Davidson & Co.“This is what telecom has needed for a long time,” said Denver-based Jaegers, who recommends buying both stocks. “You have way too many players.”Level 3 rose 13 cents, or 9 percent, to $1.57 at 12.43 p.m. New York time in Nasdaq Stock Market trading, after climbing to $1.84 for its biggest intraday increase since June 2009. The stock had climbed 47 percent this year before today. Global Crossing jumped $8.30, or 56 percent, to $23.10. Global Crossing will give Level 3 fibre lines across the Pacific Ocean and in Latin America, and add to its capacity in the US and Europe. The companies together will have their own networks in 50 countries and reach to more than 70 countries.“I don’t think it’s an exaggeration to say most other acquisitions are just about putting revenue together and cutting costs,” Crowe said in an interview. “This acquisition is about creating something new.”Level 3 lost $622 million last year and has been unprofitable on an annual basis since 1998. Global Crossing, operated out of Florham Park, New Jersey, had a net loss of $172 million in 2010 and last turned an annual profit in 2003, the year it emerged from bankruptcy.Crowe, 61, was CEO of MFS Communications Co. when it was acquired by Bernard Ebbers and WorldCom Inc. for $15.5 billion more than a decade ago. Since taking the top job at Level 3 in 1998, he has completed at least 27 deals, according to Bloomberg data. The largest purchase completed until now was the $1.24 billion acquisition of TelCove Inc. in 2006.The industry has been working to combat a capacity glut since the technology bubble a decade ago led companies, including Global Crossing, to invest in fibre-optic networks, driving down prices and hurting profitability. Improvements in technology for sending traffic over the networks have increased the capacity and performance of the fibre, exacerbating the problem, Jaegers said.Both companies have struggled with the debt they took on to build their networks. Global Crossing filed for bankruptcy in January, 2002 the largest for a telecommunications company at the time. Level 3 avoided bankruptcy the same year with the help of billionaire Warren Buffett, who invested $500 million in the company with two partners. The value of yesterday’s purchase was $3 billion, including the assumption of $1.1 billion in debt, the companies said.Singapore Technologies Telemedia, which holds 60 percent of Global Crossing’s stock, will become the largest shareholder in the combined business, the companies said. ST Telemedia will get to pick about a quarter of the board members for the combined company, Crowe said. The transaction, which is subject to shareholder and regulatory approvals, is expected to close this year, the companies said.The Global Crossing purchase would be the third-largest of more than 170 acquisitions of US telecommunication-services companies over the past three years, according to Bloomberg data. The acquirers paid a premium of 28 percent on average, compared with the target’s average price over 20 trading days before the deal’s announcement. Level 3 agreed to pay a premium of about 57 percent on that basis.Since April 2008, nine acquirers paid a median 5.8 times their target’s earnings before interest, taxes, depreciation and amortization, compared with 3.6 times for Level 3, the data show.Bank of America Corp.’s Merrill Lynch, Citigroup Inc. and Morgan Stanley advised Level 3. Goldman Sachs Group Inc. advised Global Crossing and Credit Suisse Group AG worked with ST Telemedia.