A rumor put forth by the New York Post on Saturday claims that Verizon may be exploring the possibility of purchasing The Walt Disney Company. The idea of a merger isn’t incredibly far fetched, as Verizon Communications Inc. CEO Lowell McAdam stated back in April that the company was open to mergers with Comcast, CBS, or Disney; but a full buyout by Verizon would be quite surprising.
Here is what the Post said: “One rumor making the rounds last week was that Verizon may be eyeing a Disney purchase. While that sounds fantastical, a well-placed banker told On the Money not to count Verizon out.”
While a lot of speculation stems from Verizon’s need to compete with AT&T, which recently purchased Time Warner, there are complications that place this firmly in the rumor category for now:
- Another rumor has been circulating for quite some time that Disney has been looking at a possible Netflix purchase; Disney recently used its acquisition of Maker Studios to create the Disney Digital Network, so Disney seems to have more aspirations of its own as a content provider.
- Though there has been no word from Disney as of yet, it could be likely that they prefer to maintain control and independence; they have worked to stretch their own reach outward with their parks, films, cable, video, and merchandise divisions.
- Verizon may not desire ownership of everything that currently falls under the Disney umbrella, complicating matters post-takeover.
- Disney’s market cap is $106 billion, Verizon’s is $182 billion. Assuming a hefty premium would be involved, a full takeover would be highly unlikely.
Image: Yahoo Finance – Verizon CEO Lowell McAdam (L), Disney CEO Bob Iger. (Reuters)