Potential Verizon-Charter Deal Would Test Merger-Friendliness Of New Administration

Shares of Charter Communications, Inc. (NASDAQ: CHTR) spiked to a new all-time high of $341.50 on Thursday following reports the company is in talks with Verizon Communications Inc. (NYSE: VZ) to merge their businesses.

Dow Jones was among the first to report the two companies were in discussions but cautioned that talks were in the preliminary stages and may not result in a deal.

Conflicting Reports

Charter told Benzinga in a statement that it has no comment on the report, while a Reuters report suggested that Verizon has not proposed an acquisition.

On the other hand, the Wall Street Journal reported that Verizon's CEO Lowel McAdam has indeed entered into preliminary talks with multiple cable firms, including Charter.

Prelim Opinions

While no announcements have yet to be confirmed or denied by either company, Wall Street analysts are offering their preliminary opinions on a potential deal between Verizon and Charter should it become official.

Analysts at Height Securities commented in a research report that a combination between the two companies would pose "significant antitrust risk."

The analysts further suggested that while President Trump would treat most mergers favorably his administration might take a different stance when it comes to consolidation in the wireless and cable segments.

"The merger would receive significant public scrutiny, and there may be additional economic issues presented by the overlap of Fios products and Charter's offerings," the analysts concluded.

Image Credit: By DoD photo by U.S. Air Force Staff Sgt. Marianique Santos [Public domain], via Wikimedia Commons