Verizon/Charter tie-up challenges: Regulatory review, Malone's OK

|About: Verizon Communications Inc. (VZ)|By:, SA News Editor

Though Verizon (VZ -1.5%) chief Lowell McAdam reportedly approached people tied to Charter Communications (CHTR +7.1%) -- including Liberty's Greg Maffei -- to talk about a combination, any deal would be complicated by Charter's ownership structure as well as typical antitrust concerns for an agreement of that magnitude, The Wall Street Journal notes.

The two would have a combined market cap of about $280B, along with more than $100B in debt.

Regulators would surely focus on overlapping services, including home broadband and TV in markets that include greater New York.

And any deal would require assent from John Malone, who holds a 25% voting stake in Charter through Liberty Broadband (LBRDA +7.2%), as well as the Newhouse family and its 7% stake.

While a Charter acquisition would make Verizon more like AT&T (which has its own TV business in DirecTV), Verizon execs have said they're not interested in linear TV as much as a fiber backhaul network like the sizable one Charter has.

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