The US’ largest carrier, Verizon Communications, is reportedly looking to acquire or form a joint venture with internet giant AOL to scale up its online content, mobile video and advertising services.
Verizon has not yet submitted a formal offer but…
The US’ largest carrier, Verizon Communications, is reportedly looking to acquire or form a joint venture with internet giant AOL to scale up its online content, mobile video and advertising services.
Verizon has not yet submitted a formal offer but is keen to capitalise on potential synergies originating from AOL’s automated buying and selling of ads online, which could be combined with an online-video product, according to a Bloomberg report citing people familiar with the matter.
By acquiring AOL, the operator would also gain 2.3 million internet subscribers, as well as established brands such as the Huffington Post, TechCrunch and Engadget.
The company has also reportedly held talks with several of AOL’s competitors.
A deal would enable Verizon to be better positioned against smaller rival AT&T, which is awaiting regulatory approval for its US$48.5bn takeover of pan-American DTH operator DirecTV.
However, Verizon might struggle to finance a takeover, as it has a substantial debt burden since its acquisition of Vodafone’s 45% stake in Verizon Wireless for US$130bn last year, two people familiar with the matter were quoted as saying.
The company is also taking part in the ongoing US spectrum auction, which kicked off in November and has so far raised US$44.56bn.
Verizon is reportedly trying to raise cash by offloading its network assets including mobile towers, which could fetch up to US$6bn.
After an ill-fated US$164bn merger with Time Warner in 2000, which was unwound in 2009, AOL has strived to fuel growth via acquisitions, particularly in the area of advertising, where it bought video advertising platform Adap.tv for US$405m in 2013.
AOL has a market capitalisation of US$3.54bn, while Verizon is worth around US$193bn.
Both AOL and Verizon declined to comment.
