Network service providers Level 3 Communications and Global Crossing are to merge in a $3 billion deal, pending regulatory approval.

Level 3 Communications has agreed to pay $3 billion for Global Crossing, which includes taking on $1.1 billion in debt.

Both companies operate large, global network infrastructure, and offer services including Internet access, IP-based telephony and hosting to enterprises and carriers.

Neither has fared especially well in recent times, however. Level 3 reported a 3% drop in revenues to $3.7 billion for its most recent financial year. Global Crossing grew annual revenues by 2% in its latest financial year to $2.6 billion, but has accumulated almost half that in debt.

The companies said the acquisition would create "a unique global services platform anchored by fiber optic networks on three continents, connected by extensive undersea facilities".

The stock markets approved of the deal, sending Level 3’s stock up 28% and Global Crossing’s by 61% immediately after the announcement.