In the face of a changing industry, Verizon Communications VZ is apparently open to discussing merger possibilities with a variety of media and telecom giants.
Of course, Verizon is no stranger to mergers and acquisitions. After months of sorting out prices, Verizon agreed on a nearly $350 million discount for Yahoo’s (YHOO) core business; the deal was originally valued at about $4.8 billion when it was announced last summer (read more: Yahoo Gets Boost on Updated Verizon Buyout Deal).
McAdam’s notion that the telecom industry is evolving is certainly valid, and it looks like M&As are how the giants are choosing to deal with shifting consumer demands.
Just last week, fellow wireless carrier AT&T T bought Straight Path Communications STRP in order to bolster its 5G portfolio—just months after announcing a plan to merge with Time Warner TWX. Verizon has also previously been linked with Charter CHTR, although any talks between the two seem to have fizzled out.
Verizon’s decision to buy Yahoo, although controversial, fits with McAdam’s narrative that a changing industry demands a new company focus. Although its search engine is a shell of its former self, Yahoo owns quite a bit of media, and Verizon might be able to unlock additional value in assets like Yahoo Finance and Yahoo Sports.
Similarly, a merger with a media behemoth like Disney or CBS could make the new company a telecom-entertainment giant. As users move to mobile streaming, owning both the content and the network by which the content is being accessed could prove to be valuable.
Nevertheless, a merger with Comcast could be the most realistic, as the two companies seem to have a friendly relationship. Comcast recently unveiled its new Xfinity Mobile plan, a wireless phone service that will leverage Verizon’s network when not in range of Xfinity Wi-Fi (also read: Everything You Need to Know About Comcast's Xfinity Mobile).
In an interview with Bloomberg News, McAdam said he would be open to a talk with Comcast CEO Brian Roberts.
“If Brian came knocking on the door, I’d have a discussion with him about it,” McAdam said. “Given what I know about architecture, financial requirement, cultural fit, there’s never a dream deal.”
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