The Wall Street Journal today reported that there maybe a telecom mega-merger in the works. According to a report from WSJ Verizon is eyeing a takeover of Charter Communications. The report claims that Verizon CEO Lowell McAdam has made a “preliminary approach” to Charter executives about such a deal. Yet just because there is a preliminary talks does not mean anything will come from this.
A Verizon and Charter or Comcast deal has been a Wall Street rumor for months, as analysts try to predict a more mega-merger to counter the recent merger of DIRECTV and AT&T.
This was first reported in the press last week and said Verizon Chief Executive Lowell McAdam is reportedly looking at buying one of the big two cable companies in an effort to counter AT&T’s purchase of DIRECTV. This source comes from close to the CEO and apparently happened at CES a few weeks ago.
This seems like an effort to counter not only AT&T’s purchase of DIRECTV but also its plans to buy Time Warner. Verizon can counter both purchases if it picks up Comcast, which owns NBCUniversal; however, the new talk of buying Comcast or Charter raises questions about the future of Verizon’s deal to buy Yahoo.
If a deal between any of these companies would be agreed to it would likely face strict regulatory oversight from multiple government agencies. And as cord cutting grows mergers like this will likely continue to be proposed. Dropping subscriber counts and the high cost of content and equipment will likely force mergers; however, many did not expect Comcast or Charter to be one of the early companies sold.
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