Comcast buys Time Warner Cable for $45 billion - KYTX CBS 19 Tyler Longview News Weather Sports

Comcast buys Time Warner Cable for $45 billion

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By Brian Stelter

NEW YORK (CNNMoney) -- Comcast said Thursday it had agreed to buy Time Warner Cable for $45 billion in a deal that would combine the two biggest cable companies in the United States.

If the deal is approved, the combined group will be the country's dominant provider of television channels and Internet services.

Time Warner Cable owners will be offered 2.875 Comcast shares for each share they own, valuing Time Warner Cable at about $158.82 per share.

The two companies expect the merger to take effect by the end of the year, but regulators are likely to take a close look at the potential impact on consumers.

To address those concerns, Comcast said it was prepared to divest about 3 million subscribers. But it would still have about 30 million customers.

Comcast Cable CEO Neil Smit will lead the merged company.

The proposed deal ends months of jockeying for control of Time Warner Cable, the second biggest U.S. supplier of cable television, with about 11 million subscribers in cities such as New York and Los Angeles. Smaller rival Charter wanted to buy Time Warner Cable, indicating last month it was ready to pay about $130 per share.

Time Warner Cable called that price "grossly inadequate" and countered with a suggestion of $160 per share, very close to Comcast's offer. Comcast had cast a shadow over the negotiations, and had reportedly held talks with Charter about how to divvy up Time Warner Cable's territories.

Comcast President and CEO Brian Roberts said there were compelling strategic and financial reasons for the acquisition.

The transaction will generate about $1.5 billion in savings and will boost Comcast cash flow, the companies said. It will be tax free to Time Warner Cable shareholders.

Time Warner Cable shares were up 12% at $151.49 in pre-market dealing. Comcast Corp, which said it would add $10 billion to its share buyback program once the deal closes, gained 0.7% before the open.

By swallowing Time Warner Cable on its own, Comcast will gain even more leverage over the country's marketplace for television, broadband Internet and phone services. Comcast has about 23 million television subscribers in markets like Philadelphia, where it is headquartered.

With millions more subscribers, Comcast will add muscle in its negotiations with cable channel owners like The Walt Disney Company and Time Warner, the parent company of this website. (Time Warner Cable was spun off from Time Warner in 2009 and no longer has any connection to the owner of CNN, HBO and Warner Bros.)

 

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