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Comcast has completed a deal to buy Time Warner Cable, its chief rival in the cable television provider market. The conglomerate will now make up a third of the market and consumer advocacy groups are already blasting the deal.
Comcast, which is based in Philadelphia, announced that it will buy up all of TWC’s 284.9 million shares, which have a combined $45.2 billion equity value. TWC shareholders will now have 23 percent of total Comcast stock, priced at $158.82 per share, which is based on the last closing price for Comcast’s shares.
“The combination of Time Warner Cable and Comcast creates an exciting opportunity for our company, for our customers, and for our shareholders," Brian L. Roberts, Chairman and Chief Executive Officer, Comcast Corporation said in a statement. “In addition to creating a world-class company, this is a compelling financial and strategic transaction for our shareholders.”
Comcast will try to avoid antitrust concerns by divesting 3 million subscribers. That means that Comcast will gain 8 million and its total consumer base will include 30 million subscribers.
Charter Communications was also in the running to acquire TWC, but its latest offer in January was called “inadequate” by TWC. “Charter has always maintained that our greatest opportunity to create value for our shareholders is by executing our current business plan, and that we will continue to be disciplined in this and any other M.&A. activity we pursue,” Charter said in a statement to the NY Times.
Despite its attempts to battle antitrust concerns, groups like Free Press have expressed concerns over the deal. “In an already uncompetitive market with high prices that keep going up and up, a merger of the two biggest cable companies should be unthinkable. This deal would be a disaster for consumers and must be stopped,” the media advocacy group’s CEO, Craig Aaron, said.
The combined Comcast and TWC will be lead by President and CEO Neil Smit.
image courtesy of Wikimedia Commons