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Verizon Communications on Tuesday said it has agreed to acquire Intel Media, a business unit of the tech giant that has developed next-generation video services, including a broadband-based “virtual” pay TV service that would compete with cable and satellite TV operators.
Financial terms weren’t disclosed.
The Wall Street Journal previously reported that Intel was looking for a purchase price of $500 million-plus, while Verizon was looking to offer $200 million at the most.
The transaction is expected to close later in the quarter. “The transaction will accelerate the availability of next-generation video services, both integrated with Verizon FiOS fiber-optic networks and delivered “over the top” [via broadband] to any device,” Verizon said.
Santa Clara, Calif.-based Intel Media, led by general manager and former BBC executive Erik Huggers, has been employing around 350 staffers. The deal will give Verizon intellectual property rights and other assets that enable Intel’s OnCue Cloud TV platform.
“The OnCue platform and team will help Verizon bring next-generation video services to audiences who increasingly expect to view content when, where and how they want it,” said Verizon CEO Lowell McAdam. “Verizon already has extensive video content relationships, fixed and wireless delivery networks and customer relationships in both the home and on mobile.”
He didn’t immediately detail when Verizon may launch a virtual pay TV offer, which could reach consumers outside of the footprint of its FiOS TV pay TV service.
“This transaction provides us with the capabilities to build a powerful, capitally efficient engine for future growth and innovation,” McAdam added. “We will have the opportunity to enhance, expand, accelerate and integrate our delivery of video products and services to better serve audiences on a wide array of devices.”
Said Brian Krzanich, CEO of Intel: “Intel Media’s over-the-top TV products are truly innovative and under Verizon’s ownership have the potential to change how people interact with content. The critical factor in gaining efficient access to content is based on your ability to scale quickly in subscribers and end users, which is why selling these assets to Verizon makes perfect sense, with its millions of FiOS network and wireless customers.”
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