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Verizon does not feel pressure to do big deal: CEO
May 8, 2017 / 10:42 PM / 6 months ago

Verizon does not feel pressure to do big deal: CEO

NEW YORK (Reuters) - Verizon Communications Inc (VZ.N) does not see an urgent need to undertake a big strategic merger or acquisition, its chief executive said on Monday, as some Wall Street analysts have urged the wireless company to do.

The Verizon logo is seen on the side of a truck in New York City, U.S., October 13, 2016. REUTERS/Brendan McDermid

Some analysts believe Verizon needs a more transformative acquisition than its $4.48 billion deal for Yahoo Inc’s YHOO.O core business to diversify away from the slow-growth wireless industry as it battles smaller rivals in an oversaturated market for U.S. mobile phone service.

Verizon, the No. 1 U.S. wireless carrier, last month reported its first-ever quarterly loss in subscribers who pay a monthly bill, its most valuable customers.

After saying he was referring to M&A speculation, Chief Executive Lowell McAdam told a meeting with analysts, “We don’t feel the urgency that seems to be out there in the analyst community, the banking community and the media.”

Verizon’s main competitor, AT&T Inc (T.N), is planning an $85.4 billion acquisition of Time Warner Inc (TWX.N), which would give it control of cable TV channels like HBO and other coveted media assets.

FILE PHOTO - Lowell McAdam, Verizon's chief executive officer (CEO), speaks at the closing first day keynote at the Consumer Electronics Show (CES) in Las Vegas January 8, 2013. REUTERS/Rick Wilking

Cable provider Charter Communications Inc (CHTR.O) was at one time considered a possible target for Verizon. In January, Reuters reported Verizon was interested in exploring a combination with Charter among a long list of potential acquisition targets.

But an agreement between Charter and rival cable provider Comcast Corp (CMCSA.O) announced on Monday would prohibit a Verizon-Charter combination.

The agreement, which aims to cut costs and speed up the cable companies’ entry into the wireless market, also bars Comcast and Charter from entering into a material transaction for a year without the other company’s consent. That would prevent either company from tying up with a wireless carrier on its own.

At the meeting, McAdam said the agreement does not change the companies’ relationships with Verizon. Both companies will launch wireless services using Verizon’s airwaves.

“Frankly, we encouraged them to work together because dealing with one customer is a lot better than dealing with multiple customers,” he said.

Reporting by Anjali Athavaley; Editing by Cynthia Osterman

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