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US pay TV megadeal as Comcast moves to take over Time Warner Cable


US pay TV megadeal as Comcast moves to take over Time Warner Cable


The two largest US cable TV operators are set to merge.

Comcast is to buy Time Warner Cable for the equivalent of 33 billion euros in an all-stock deal.

The friendly takeover comes as a surprise after months of a public pursuit of Time Warner Cable by its smaller rival Charter Communications.

The big question is whether such a deal would be approved by competition regulators.

To stand a chance, Time Warner Cable would have to shed three million subscribers, about a quarter its 12 million customers.

Comcast has 22 million. They are way ahead of the third and fourth placed cable firms – Cox Communications with 4.5 million and the spurned suitor Charter Communications with 4.0 million.

The nearest rival is satellite service, DirecTV, with 20 million customers.

A Comcast Time Warner Cable merger would however dominate broadband internet in the US which could upset competition regulators.

“A deal may face a fierce battle in Washington as you are merging the two largest cable operators,” Janney analyst Tony Wible said in a research note.

He noted that Comcast and Time Warner Cable do not directly compete in any markets and a merger could help consumers by keeping programming costs in check.

But he added: “The government could still object and may be more concerned about one company controlling so much of the country’s broadband infrastructure”.

Comcast is to pay about the same per share ($158.82) as Time Warner Cable had demanded from Charter, and it argues the deal will be beneficial to consumers.

On Wall Street Time Warner Cable shares rose sharply. Comcast’s fell as did Charter Communications’ which had been pursuing Time Warner Cable for months.

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