Verizon is exploring a deal to merge with Charter Communications, in a move which would tie-up two of the US’ largest telecoms and cable companies.
According to The Wall Street Journal (WSJ), Verizon CEO Lowell McAdam made a preliminary approach to Charter and is currently working with advisers to explore a potential deal. Charter’s market value stands at more than $80 billion.
The news follows widespread recent reports stating McAdam hinted he was mulling the acquisition of a cable company during the recent CES event in Las Vegas. At the time, Charter and Comcast were both in the frame.
Although McAdam’s deliberation appears to have developed into something more concrete, WSJ sources cautioned there is no guarantee a deal will materialise, or whether Charter’s top executives, including CEO Tom Rutledge, would be open to the tie-up.
Verizon’s mooted move into cable follows recent deals made by main US rival AT&T, which is plunging billions into combining content with distribution.
It acquired pay-tv player DirecTV in July 2015, recently launched a new streaming service, and is currently looking to secure regulatory approval for its proposed $85 billion acquisition of Time Warner.
Charter operates a cable network, providing television services to 17 million subscribers and broadband connections to 21 million. Verizon, meanwhile, is the largest operator in the US, with more than 114 million mobile subscribers.
The company already operates its Fios pay-TV service, and provides high-speed internet, albeit on a smaller scale to the larger cable rivals in the space.
Any deal will no doubt face close regulatory scrutiny given some of the overlaps between both companies.
New President Donald Trump’s likely stance on any deal is also unclear. During his election campaign he said he would block AT&T’s deal for Time Warner, although he stayed tight lipped about the deal publicly since taking office.