Tuesday 30 September 2014
 
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FRIENDLY TAKEOVER

Comcast buys Time Warner Cable for $45bn

Washington, February 13, 2014

Comcast Corp is buying Time Warner Cable for $45.2 billion in an all-stock deal, combining the nation's two largest cable operators, according to people familiar with the matter.

The friendly takeover comes as a surprise after months of public pursuit of Time Warner Cable by smaller rival Charter Communications, and immediately raised questions as to whether it would pass regulatory scrutiny.

Comcast will pay $158.82 per share, which is roughly what Time Warner Cable demanded from Charter, and the deal will be announced on Thursday morning, the people said.

The combined company would divest 3 million subscribers, about a quarter of Time Warner's 12 million customers, the people said. Together with Comcast's 22 million video subscribers, the roughly 30 million total would represent just under 30 per cent of the US pay television video market.

The new cable giant would tower over its closest video competitor, DirecTV, which has about 20 million video customers.

If successful, the deal will be the second time in little more than a year that Comcast has helped reshape the US media landscape after its $17 billion acquisition of NBC Universal was completed in 2013.

The proposed combination, which would give roughly 23 percent of the merged company to Time Warner Cable shareholders, is subject to regulatory approval and the two companies expect to close the deal by the end of the year, the people said.

The new partners are concentrated in different cities. Comcast would fill in its New Jersey and Connecticut portfolio with Time Warner Cable's New York City customers, for instance, and add major markets such as Los Angeles and Dallas.

"Comcast and Time Warner Cable don't compete and Comcast can easily divest a few million subscribers," said BTIG analyst Rich Greenfield.

While the attempt to merge the two largest US cable operators would face tough regulatory scrutiny, a divestiture of subscribers should help its case with regulators, he added.

It was not yet clear which markets Comcast would sell.

The companies expect to create $1.5 billion in operating savings, with 50 per cent of those savings expected in the first year, the people said, asking not to be named because the matter is not yet public.-Reuters




Tags: Time Warner Cable |

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