Thu, Apr 20, 2017 - Page 10 News List

Verizon chief executive open to discussing mergers

COMCAST TO DISNEY:Lowell McAdam said he is looking for new sources of growth as the company focuses on building a 5G network and is willing to talk to lots of people

Bloomberg

Verizon Communications Inc is considering merger possibilities to reset the course of the company given the fast-changing structure of the industry, and would be open to talks with Comcast Corp, Walt Disney Co or CBS Corp, chief executive officer Lowell McAdam said.

Verizon, the largest US wireless carrier, is seeking new sources of growth as the mobile-phone business matures and its new media ventures take time to gain traction.

Comcast’s assets in particular would help Verizon build a fiber-optic network to handle a deluge of video streaming and ultra-fast 5G technology. Verizon would entertain a deal with Comcast CEO Brian Roberts to roll out that network faster, McAdam said in an interview on Tuesday at Bloomberg’s New York headquarters.

“If Brian came knocking on the door, I’d have a discussion with him about it,” McAdam said. “But I’d also tell you there isn’t much that I wouldn’t have a discussion around if somebody came and said ‘Here’s a compelling reason why we ought to put the businesses together.”’

Among cable operators, Comcast has the best fiber assets, in addition to a compelling media business with NBCUniversal. Still, McAdam said he would take that same call from Disney’s Bob Iger or CBS’ Les Moonves.

Shares of all three potential merger companions rose on McAdam’s comments. Comcast climbed 1.1 percent, CBS rose 1.8 percent and Disney advanced 0.4 percent.

Representatives for Comcast and CBS declined to comment. A representative for Disney did not immediately return calls seeking comment.

A combination between Verizon and any of the three companies would dramatically reshape the media and telecommunications industry, following AT&T Inc’s US$85.4 billion proposed acquisition of Time Warner Inc — a deal that would make the phone carrier one of the biggest producers of TV shows and movies in the world.

A major media deal would be a departure for New York-based Verizon, whose acquisition strategy has so far contrasted with that of arch-nemesis AT&T.

While the Dallas-based phone carrier snapped up satellite provider DirecTV and agreed to buy Time Warner in transactions valued in the tens of billions of dollars, Verizon has spurned old media and kept its purchases below US$5 billion.

Verizon’s most prominent entertainment investment so far has been go90, a free, YouTube-like video streaming service targeted at teens and preteens. The service has not been a huge hit, so other media platforms that get more viewers could be attractive for Verizon.

In the last two years, McAdam’s company has done deals for advertising technology and Web traffic, acquiring AOL Inc and the Internet assets of Yahoo Inc. Those are a far cry from McAdam’s most famous deal, the US$130 billion acquisition of Vodafone Group PLC’s stake in Verizon Wireless in 2014.

“Randall buying into content has made people reevaluate their portfolio,” McAdam said of AT&T chief executive Randall Stephenson. “We’re still very excited about Yahoo, bringing them into the fold with AOL. We’re building a lot of millennial-focused content. There are a lot of options out there.”

Verizon has already been linked to a merger with Charter Communications Inc. Earlier this year, a person familiar with the matter said Verizon was studying more than 10 options, including large media companies, fiber-optic services providers and network and cable operators, including Charter.

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