Did one of the largest telecom companies in the country offer to takeover one of the largest cable companies? The New York Post reports that Verizon Communications Inc. (NYSE: VZ) offered about $100 billion to takeover Charter Communications Inc. (NASDAQ: CHTR). The marriage would create the largest TV to the home, broadband and wireless corporation in America. It would also be one of the largest content companies, due in some part to Verizon’s ownership of AOL and upcoming buyout of Yahoo.
According to the Post:
The offer — valued at between $350 and $400 a share, and well over $100 billion, according to two of the sources familiar with the move — was rejected by Liberty Media-controlled Charter because it was too low — and because Charter was not ready to sell.
The offer was made in recent months.
Verizon faces the challenge that rival AT&T Inc. (NYSE: T) is in the midst of a takeover of Time Warner Inc. (NYSE: TWX), which will give it a huge and growing library of content. AT&T also has a large network of wireless subscribers, matched only by Verizon. AT&T additionally has a fiber to the home business and its traditional landline business. Charter has also grown via acquisitions. It bought Time Warner Cable in 2015 for $55 billion. And Verizon must also face the fact that Comcast Corp. (NASDAQ: CMCSA), the largest cable company in America, has the content assets of its NBCUniversal operations.
The growing number of marriages among carriers and content companies has been driven by management perceptions that they are better off owning the conduit to the home and the smartphone along with much of the content these same customers want. The two primary hurdles to the plans are government regulation, which may keep companies from controlling too many assets and threatening consumer choices, and the billions of dollars of debt involved in the acquisitions.
None of the hurdles has prevented buyouts. The Verizon and Charter rumor is another piece of evidence of that.