Internet provider Level 3 Communications announced Monday it is acquiring networking company Global Crossing in a stock deal valued at $3 billion, the latest consolidation in the telecom sector.

The combined company will provide fiber optic connections to more than 70 countries on three continents and comes about three weeks after US telecom giant AT&T's $39 billion proposed acquisition of T-Mobile USA.

The deal calls for Global Crossing shareholders to receive 16 shares of Level 3 common stock for each share of their Global Crossing stock.

The companies said that based on Level 3's closing stock price on Friday, the deal is valued at $3 billion, including the assumption by Level 3 of $1.1 billion of Global Crossing's debt.

"The new entity will offer enterprise, government, wholesale, content, and Web-based customers a comprehensive portfolio of end-to-end data, video and voice solutions," the companies said in a statement.

Level 3 is based in Broomfield, Colorado while Global Crossing is based in Bermuda. Its largest shareholder is Singapore Technologies Telemedia (ST Telemedia), which owns some 60 percent of Global Crossing's stock.

"This is a transformational combination that we believe will deliver significant value to the investors, customers and employees of both Level 3 and Global Crossing," Level 3 chief executive Jim Crowe said in a statement.

"We are creating a highly efficient and more extensive global platform that is well-positioned to meet the local and international needs of our customers," Crowe said.

ST Telemedia will be a "significant investor" in the new company, he said.

"They know the technology and they know the industry," Crowe said. "The breadth of their communications experience and their knowledge of international markets will be a great asset to us."

"This strategic combination is an important milestone for both Global Crossing and Level 3, and a value-creating proposition for all stakeholders," said Lee Theng Kiat, president and chief executive of ST Telemedia.

"Going forward, we believe the combined strengths of the two companies will position it in a very favorable, competitive position to expand in the US and compete globally," he said.

The two companies had combined total revenue of $6.26 billion last year.

The acquisition, which is subject to approval by the US Department of Justice and Federal Communications Commission and the stockholders of each company, is expected to close before the end of the year.