Movers and Shakers: M&A Wrap-Up

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Charter + TWC is the largest merger in US cable industry history.

And not only is Charter-TWC the largest acquisition in American cable and broadband history (per the New York Times Dealbook), the Charter-Bright House acquisition is actually the eighth largest.

So 2015 has been a big year for M&A based on Charter’s activity alone. But wait, there’s more!

AT&T and DirecTV

Announced in 2014 but not finalized until 2015, AT&T’s (NYSE: T) acquisition of satellite provider DirecTV is the third largest acquisition in pay-TV history, clocking in at $48B, and creates the world’s largest pay-TV provider, leapfrogging Comcast and serving more than 26 million U.S. subscribers plus another 19 million subs in Latin America.

But this deal is about more than size. It’s an indication of the continued blending of services offered by carriers as they strive to compete with new competitors. “This is not just television, but it’s also wireless TV over the AT&T Mobility network,” Kagan said. “That’s a huge competitive advantage of many cable television competitors.”

Altice’s Spree

Netherlands-based Altice, already the second-largest communications company in France, has been making some serious moves. In June, it completed its $8.26B acquisition of Portugal Telecom, a deal that was sandwiched between two announcements of Altice’s move into the U.S. cable market. Altice announced that it will buy Suddenlink, the number seven cableco in the U.S., back in April, and followed up with the acquisition of CableVision (NYSE: CVC) in September. With those two purchases complete, Altice will become the number four cable provider in the U.S., behind only Comcast, the new Charter, and privately held Cox—an oft-mentioned acquisition target in its own right, though company leadership has repeatedly stated that it has no intention of selling.

It hasn’t been totally smooth sailing for Altice, as its bid for Bouyges Telecom failed back in June, and the company has announced that it will pause its M&A activity for a while as it integrates its existing spoils. However, Altice CEO, Dexter Goei, has stated that their position could change should Cox become available.

BT and EE

BT (LSE: BT-A) (NYSE: BT.US) has just scored regulatory approval from the UK’s Competition and Markets Authority (CMA) to move ahead with its acquisition of EE, Britain’s largest mobile operator. The £12.5B deal was able to move ahead, according to The Telegraph, largely because it does not reduce the number of independent mobile operators in the UK. BT has a branded mobile offering, but it operates on the EE network. There would still be four main networks: BT-EE, Vodafone, Three, and O2. Unless….

Three and O2

Hong Kong-based CK Hutchison Holdings, which owns Three, agreed to purchase O2 from Telefonica back in March. The deal is worth £10.25B, and would create the UK’s largest mobile company with a combined 31 million subscribers. This deal, however, would reduce the number of independent mobile providers and has been tied up in EU inquiries, resistance from Ofcom, and other setbacks. If it does move forward, however, it would be yet another indicator of the pressure to consolidate in an era of changing user behavior.

Verizon and AOL

Speaking of competitive pressure, Verizon (NYSE: VZA) has acquired what initially looks like a bit of an antique. However, as Fortune notes, its $4.4B acquisition of AOL brings with it a sizeable content network (Huffington Post, Tech Crunch, Engadget) and, even more notably, the sophisticated advertising platform underpinning those sites—particularly strong when it comes to video advertising. With Verizon reportedly poised to launch an internet video service, it could follow in the footsteps of carriers like Turkcell and NTT Docomo, which have had success in that arena. So in addition to owning the email and dial-up accounts of numerous uncles and grandmothers, Verizon thinks it may have bought a little something for the future.

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