rain
Friday May 27th, 2016 4:42AM

Comcast to buy Time Warner Cable for $45 billion

By The Associated Press
LOS ANGELES (AP) -- Comcast Corp. has confirmed that it agreed to buy Time Warner Cable Inc. for about $45.2 billion in stock, or $158.82 per share, in a deal that would combine the nation's top two cable TV companies.<br /> <br /> The deal will make Comcast, which also owns NBCUniversal, a dominant force in both creating and delivering entertainment to U.S. homes.<br /> <br /> The deal was approved by the boards of both companies and, pending regulatory approval, is expected to close by the end of the year.<br /> <br /> The price is about 17 percent above Time Warner Cable shares' Wednesday closing price of $135.31 and trumps a proposal by Charter Communications Inc. to buy Time Warner for about $132.50 per share, or $38 billion in cash and stock.<br /> <br /> Time Warner Cable shareholders will receive 2.875 Comcast shares for every Time Warner Cable share they own. Once the deal is final, they will end up owning about 23 percent of the combined company.<br /> <br /> Charter had pursued Time Warner Cable for months, but Time Warner Cable CEO Rob Marcus had consistently rejected what he called a lowball offer, saying he'd cut a deal for $160 per share in cash and stock.<br /> <br /> For a time, Comcast stayed in the background, waiting to purchase any chunk of subscribers that a combined Charter-Time Warner Cable would sell off. Charter had planned to finance its bid with $25 billion in new debt. As part of a plan to pay off the debt quickly, the company considered selling off some of its territories after a deal had closed. Time Warner Cable's Marcus had also balked at the huge debt burden the Charter takeover represented.<br /> <br /> Instead, Comcast now plans to divest 3 million pay TV subscribers after the deal closes. With 22 million of its own pay TV customers and Time Warner Cable's 11.2 million, the combined entity will end up with about 30 million subscribers when the deal is complete, a level believed not to trigger the concern of antitrust authorities. A formal cap was dissolved years ago by regulators, but divesting subscribers could help the deal get approved more quickly.<br /> <br /> Comcast is taking the position that because Comcast and Time Warner Cable don't serve overlapping markets, their combination won't reduce competition for consumers. Comcast operates mainly in the northeast including its home base of Philadelphia and places such as Boston, Washington and Chicago. Time Warner Cable has strongholds around its headquarters in New York as well as Los Angeles, Dallas and Milwaukee.<br /> <br /> In many of those areas, the combined Comcast/Time Warner Cable will face competition from rivals AT&T and Verizon, which provide both pay TV services and Internet hookups. Both AT&T and Verizon are growing quickly. They ended 2013 with 5.5 million and 5.3 million pay TV subscribers, respectively.<br /> <br /> Comcast and Time Warner Cable are expected to save $1.5 billion in annual costs over three years, with half of that realized in the first year.<br /> <br /> Comcast also plans to add an additional $10 billion in share buybacks at the close of the deal, on top of a recent plan to boost its share buyback authority to $7.5 billion from $1 billion.<br /> <br /> Conceding that it had lost the takeover battle, Charter issued a statement Wednesday saying, "Charter has always maintained that our greatest opportunity to create value for shareholders is by executing our current business plan, and that we will continue to be disciplined in this and any other (merger and acquisition) activity we pursue."<br /> <br /> Even before the deal had been formally announced, it was being denounced. Public Knowledge, a Washington-based consumer rights group, said in a statement Wednesday that regulators must stop the deal, because it would give Comcast "unprecedented gatekeeper power in several important markets."<br /> <br /> "An enlarged Comcast would be the bully in the schoolyard," it said.<br /> <br />
  • Associated Categories: U.S. News, Business News
© Copyright 2016 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
Judge denies motions to move, delay Tsarnaev trial
Lawyers for Boston Marathon bombing suspect Dzhokhar Tsarnaev asked a federal appeals court Wednesday to overturn a judge's decision to not move his upcoming trial out of state.
10:02PM ( 1 year ago )
High court to adopt electronic filing of cases
The Supreme Court is belatedly developing an electronic filing system similar to those used in courts around the country, Chief Justice John Roberts said Wednesday in his annual end-of-year report.
7:57PM ( 1 year ago )
Storm brings snow, cold to West for New Year's
A blustery winter storm dumped snow and ice across the West on Wednesday, making driving treacherous in the mountains from California to the Rockies and forcing residents and party-goers in some usually sun-soaked cities to bundle up for a frosty New Year's.
5:19PM ( 1 year ago )
U.S. News
State DOT awards $48M contract for NE Ga. road project
The state Department of Transportation has awarded a $47.8 million contract for nine miles of work on a northeast Georgia road.
9:37AM ( 1 year ago )
Business News
Amid shouts of 'shame,' House GOP defeats gay rights measure
Democrats shouted "shame," but House Republicans switched their votes and defeated a measure to protect gay rights
8:03PM ( 1 week ago )
CDC director Freiden warns GOP Zika bill is inadequate
The head of the Centers for Disease Control and Prevention warned Wednesday that a House GOP measure to combat the Zika virus is inadequate to deal with the swelling threat to public health
7:36PM ( 1 week ago )
Trump unveils list of his top picks for Supreme Court
Donald Trump, the presumptive Republican nominee for president, released Wednesday a list of 11 potential Supreme Court justices he plans to vet to fill the seat of late Justice Antonin Scalia if he's elected to the White House.
3:31PM ( 1 week ago )
1st US penis transplant could bring hope to maimed soldiers
A 64-year-old cancer patient has received the nation's first penis transplant, a groundbreaking operation that may also help U.S. veterans maimed by roadside bombs
8:04PM ( 1 week ago )
States dig in against directive on transgender bathroom use
Politicians in Texas, Arkansas and elsewhere are vowing defiance over the Obama administration's new directive on transgender bathroom use
9:19PM ( 1 week ago )