Comcast scrapped its $45 billion proposal to merge with Time Warner Cable after being faced with potential roadblocks from federal regulators who have been leery of the merger due to concerns about unfair competition and harm to industry innovation.
The ending of the merger proposal came in a terse statement on April 24 from Brian L. Roberts, chairman and CEO of Comcast Corp., who back in February 2014 had announced the then-newly-proposed deal as an exciting opportunity for the company, its customers and for its shareholders.
"Today, we move on," Roberts said in his statement. "Of course, we would have liked to bring our great products to new cities, but we structured this deal so that if the government didn't agree, we could walk away."
Comcast NBCUniversal continues to have strong momentum despite the end of the merger idea, he said. "I couldn't be more proud of this company, and I am truly excited for what's next."
In a separate statement on the ending of the merger plans, Time Warner Cable's Chairman and CEO Robert D. Marcus said that the company has "been laser-focused on executing our operating plan and investing in our plant, products and people to deliver great experiences to our customers. Through our strong operational execution and smart capital allocation, we are confident we will continue to create significant value for shareholders."
Marcus called his own company a one-of-a-kind asset that is "strong and getting stronger."
Tom Wheeler, the chairman of the Federal Communications Commission, which has been actively reviewing the merger proposal from the start, said in a statement that the ending of the proposal came on the heels of meetings earlier this week with officials from the FCC and the U.S. Department of Justice.
"Comcast and Time Warner Cable's decision to end Comcast's proposed acquisition of Time Warner Cable is in the best interests of consumers," Wheeler said in his statement. "The proposed transaction would have created a company with the most broadband and the video subscribers in the nation alongside the ownership of significant programming interests. Today, an online video market is emerging that offers new business models and greater consumer choice. The proposed merger would have posed an unacceptable risk to competition and innovation, including to the ability of online video providers to reach and serve consumers."
An April 23 report by The Philadelphia Inquirer said that the merger deal "seemed dead … after the staff of the Federal Communications Commission reportedly favored sending the $45 billion transaction to an administrative law judge for a decision," which indicated "that the FCC does not believe the deal would benefit consumers."
Such a hearing "would offer Comcast opponents another public forum in which to blast the transaction," the article reported, rather than private negotiations between high-level FCC officials and Comcast executives over the merger conditions.
Robert McDowell, a former FCC member, told The Philadelphia Inquirer that such a process would be almost impossible for Comcast to win and could force a final decision in federal appeals court that could take months of litigating and millions of dollars.
"The FCC fired the fatal bullet," McDowell told the newspaper. "An FCC designation for a hearing is really a bullet to the heart of the deal. There is no way out."
The proposed mega-merger has had critics and inspired regulatory worries since it began.
Back in July 2014, executives from Dish Network told the Federal Communications Commission (FCC) that the mega-merger of the two giants in the U.S. cable industry would hurt competition and be bad for consumers, according to an earlier eWEEK report.