Verizon and Charter both have their fair share of debt, and if the two companies do decide to tie up and merge, the combined debt could hit around $200 billion, according to analysts. As of the end of 2016, Verizon had around $116 billion in debt. And between the debt that Charter has, and the amount of money Verizon would need to borrow to finance a deal to buy Charter, that could put their debt around $200 billion or even higher. Which is going to affect the company's investment grade moving forward.
According to data compiled by Bloomberg Intelligence, the merged company would be the most indebted non-financial company in the world. Even ahead of AT&T, which is rumored to be borrowing about $40 billion to purchase Time Warner Inc. It would also be ahead of Anheuser-Busch InBev NV. This is a pretty big deal for investors and shareholders, and would make Verizon's goal of decreasing their debt even harder to accomplish. Now it's not uncommon for companies to have large amounts of debt, but it uncommon for companies to have debt of this magnitude.
Apparently Verizon and Charter hasn't talked about a merger, or acquisition, directly. Lowell McAdam, Verizon's CEO actually approached the CEO of Liberty Broadband, the largest shareholder of Charter Communications. Of course, this is all coming from someone familiar with the matter. So it could be true, and likely is, but that doesn't mean that Verizon and Charter won't be in direct contact in the coming days, weeks or months.
If Verizon and Charter do merge to create one company, it would become the largest wireless and Internet provider in the US. With Verizon already having the largest wireless network and Charter being second in ISP's behind Comcast - combine that with Verizon's current FiOS customer-base and they become the largest. So this merger, if it does indeed happen, is no small merger, and could likely be even larger than the AT&T and Time Warner merger that was announced last fall. That acquisition still hasn't been approved by shareholders nor the regulators here in the US, but they do expect it to clear in the first half of the year.