First reported by CNBC today and mentioned by CNBC’s David Faber on Twitter, Comcast is expected to announce a deal tomorrow that will combine the two largest cable companies in the United States. Acquiring Time Warner Cable Inc. for approximately $159 a share, the deal will be announced officially on Thursday morning. The deal is expected to total up to about $45 billion assuming it passes muster with the Federal Communications Commission (FCC). Also according to Faber, Comcast is expected to get rid of about 3 million subscribers in order to push the deal though.
Assuming the proposed deal gains regulatory approval from the FCC, this would combine all the video and Internet subscribers under the Comcast umbrella. That would total up to about 33 million video subscribers and 31 million broadband subscribers, prior to Comcast shedding 3 million subscribers. That will place companies like Cox Communications and Charter in a distant 2nd and 3rd place. People familiar with the structure of the deal expect to finish out all the details and gain approval from the FCC before the end of the year.
Opposite from Charter’s interest in Time Warner Cable, this deal is less of a hostile takeover and more of a friendly merger. Prior to this point, Charter’s management was attempting to negotiate a deal that would have offered Time Warner Cable shareholders about $132 a share and valued the company around $37 billion. However, Time Warner’s board rejected the offer in a unanimous vote and called the deal “grossly inadequate.”
Regarding the consumer transition, it’s unclear at this time if consumers will simply be moved over to Comcast or if the cable giant will continue using the Time Warner Cable brand name for the near future. It’s also possible that Comcast could sell specific markets of Time Warner Cable off to competing cable companies. It’s likely that more details about the merger will be released tomorrow when the news is officially released by the two companies.
- What is HBO Max?
- Why 2021 could be the beginning of the end for cable TV
- HBO Max proves your ISP can make a streaming offer you can’t refuse
- Everything coming to Peacock, NBCUniversal’s streaming video service
- Comcast cable subscribers’ bills will go up in 2020