Verizon CEO Lowell McAdam has approached Liberty Media CEO Greg Maffei about Verizon (NYSE: VZ) acquiring Charter Communications (NASDAQ: CHTR), according to reports; Liberty (NASDAQ: LMCA
) currently holds a 25% stake in the cable and internet service provider. No offer has reportedly been made, but any deal would be of a massive scale. Charter has a market cap of roughly $83 billion, while Verizon's is $199 billion. The reports come less than a year after Charter acquired Time Warner Cable and Bright House Networks, part of ongoing consolidation in the telecom sphere.
In some ways, though, a Verizon-Charter merger would represent a pivot from the strategy recently employed by industry rivals Comcast and AT&T, which sought to bring distribution and content together in recent years by acquiring NBCUniversal (2013) and DirecTV (2015), respectively. For Verizon, the deal may be particularly appealing considering the presence of Ajit Pai, who once worked as a lawyer with Verizon, as the new head of the FCC. Pai has opposed the current iteration of net neutrality enforced by the agency, with some anticipating a rollback of the regulatory framework. Verizon's stock dropped 1% on the news while Charter jumped more than 7%.