Charter to Acquire Time Warner Cable for $55 billion

By | May 26, 2015

On Tuesday, Charter Communications Inc announced to buy Time Warner Cable Inc in a cash-and-stock deal valuing around $55 billion, shaking up the cable provider after getting competition from the US’ top cable provider Comcast Corp. The deal is expected to transform the company into one of the America’s largest cable and broadband operators.


The purchase price is excluding the debt. Charter will pay $195.7 per share that is 14% more than the price on Monday. Also, it will pay $100 in cash and the rest in its own stock, according to a statement. The previously agreed to buy company, Bright House Networks, will also be merged with the company to make it a combined entity.

The announcement of acquisition shows the flooding of takeovers in the cable sectors are the companies are trying hard to keep pace with the immense changes in the habits of how Americans watch and pay for television. Increase in the live streaming of the videos through the internet, cable providers are on a lookout for deals to increase their scale and greater bargaining power among the content providers.

Controlled by big billionaire John Malone, Charter is making the bravest progress to take care of a company that is bigger in revenue and larger in market share, very soon after Comcast failed in its bid to buy Time Warner Cable. Even Charger was part of the race to buy Time Warner Cable but was outbid by Comcast.

The two acquisitions – Bright House Networks and Time Warner Cable would on an average quadruple Charter’s base to about 24 million customers, compared with Comcast’s 27 million. The companies would be renamed to New Charter, on the completion of the deal.  “With our larger reach, we will be able to accelerate the deployment of faster Internet speeds, state-of the-art video experiences, and fully featured voice products, at highly competitive prices,” said Charter’s chief executive Thomas Rutledge in a statement. He also added, “The scale of New Charter positions us to deliver a communications future that will unleash the full power of the two-way, interactive cable network.”

As Charter has not got the regulatory approval for the deal, it is still vague to know whether there would be any differences in the service for the Time Warner Cable subscribers. If approved, heavy investment would be needed for combined Charter-Time Warner Cable to keep in track and pace with the Comcast, which is under the process of building the X1 services that allows its customers to record and stream programs to its devices.