America’s two largest cable providers will become one. Comcast announced on Thursday morning that it has agreed to buy Time Warner Cable Inc. in an all stock deal worth $159 a share, or $45 billion, a surprise deal that creates a bulwark against competition from phone and satellite providers.
The transaction, subject to approval by stockholders and regulators, is expected to be completed by the end of 2014.
Bloomberg news reports,
In sealing the deal, Comcast Chief Executive Officer Brian Roberts trumped a bid from Charter Communications Inc. (CHTR) and its billionaire backer John Malone, who had courted Time Warner Cable for months. Holding out for a better offer than Charter’s $132.50-a-share bid allowed Time Warner Cable to deliver an almost 70 percent gain for shareholders since the end of May.
“This leaves Comcast as the sole king of the cable hill, with John Malone and Charter hitting a brick wall in their hopes of becoming a close No. 2,” said Richard Greenfield, an analyst with BTIG LLC. “This is a game changer for Comcast.”
Having so few large companies control such a large percentage of the nation’s programming will make it much more difficult for new and/or smaller networks to have a seat at the table.
9 TV distributors control roughly 91 percent of channel lineups and with this deal, Comcast only stands to grow even more influential in the cable industry.
