US based phone and internet provider Verizon has agreed to pay less than $200 million to buy Intel’s Internet-television startup, two people with knowledge of the matter said.

The two companies announced the deal in a statement this morning, saying it included about 350 Intel employees coming to Verizon. The people familiar with the price asked not to be identified because the companies aren’t disclosing the transaction’s financial terms.

Intel, the world’s largest chipmaker, began looking for a buyer for its OnCue TV business last year. The Santa Clara, California-based company no longer wanted to incur the expense of acquiring programming and bringing the service to market on its own. In Verizon’s hands, OnCue could provide fresh ammunition against cable and satellite providers. The phone company could use the Internet-based service to offer TV in places not currently served by its FiOS network.

OnCue is designed to provide pay-TV programming over any high-speed Internet connection, making it a threat to cable-TV services that deliver shows over dedicated lines restricted by territory. Intel’s system includes servers, set-top boxes and applications that can stream content to televisions, phones and tablets.

As part of the deal, New York-based Verizon will purchase intellectual property rights and other assets related to the OnCue platform, the companies said. Intel Media’s management team will stay with the business.

Authors -  Scott Moritz and Ian King

Originally Published - Bloomberg