×
Pro Analysis

Breakingviews: Verizon’s ambition brings risk of illogical buying

Lowell McAdam, CEO, Verizon Communications
Getty Images
Lowell McAdam, CEO, Verizon Communications

Verizon Communications may be in the market for a cable guy. The $200 billion telecommunications firm is eyeing $84 billion Charter Communications after taking on smaller AOL and, assuming the deal actually happens, bits of Yahoo. Past splashy bets like shelling out $130 billion to buy out Vodafone's stake in their U.S. wireless joint venture are showing signs of structural decline. Verizon's search for new businesses is looking haphazard.

Verizon is working with advisers on a potential transaction, according to the Wall Street Journal on Thursday. That suggests any plan is still in the early stages and it's unclear if Charter, which is nearly one-quarter owned by media mogul John Malone's Liberty Broadband, would be receptive.

(Note: Sources told CNBC no significant talks are taking place right now between the two.)

Still, Verizon Chief Executive Lowell McAdam extolled the merits of a tie-up with Charter just last month. AT&T's nearly $50 billion purchase of DirecTV in 2015 may have something to do with it. Verizon's telco rival said on Wednesday that it added more than 200,000 paid subscribers to its video-streaming service, DirecTV Now, in the first month.