Two U.S. cable media giants--one on the way up (Comcast), the other (Time Warner Cable) treading water--confirmed Feb. 13 that they will combine forces in a $45.2 billion-in-stock merger that will unite the country's two largest cable television providers to serve 35 million customers coast to coast.
Comcast had to outbid Charter Communications for Time Warner Cable. All of the company's 284.9 million shares were acquired at a value of $158.82 per share. If and when the deal is complete, Time Warner shareholders will own about 23 percent of Comcast's common stock.
Comcast has about 24 million cable subscribers and Time Warner Cable 11 million, down from 12 million a year ago. The next competitors in the U.S. line are Cox Communications (4.6 million customers), Verizon (4.6 million) and AT&T (4.3 million).
Comcast controls about 20 percent of the U.S. pay-television market and is already the nation's largest Internet and cable TV provider. It also owns NBC Universal, a movie studio and a number of cable channels.
Time Warner Cable, formerly Warner Cable Communications, operates in 29 states and has 31 operating divisions. It was founded as a spinoff of Time Warner in 1989. Its CEO is Robert D. Marcus, and its headquarters are in New York City.
"The combination of Time Warner Cable and Comcast creates an exciting opportunity for our company, for our customers, and for our shareholders," Comcast Chairman and CEO Brian Roberts said in a statement.
"In addition to creating a world-class company, this is a compelling financial and strategic transaction for our shareholders."
The deal, which has already brought some negative comments in the social networks and elsewhere because of the size and market influence of the potential new company, must be approved by the Federal Communications Commission and the Justice Department. Comcast said it expects the review to last until the end of the year.
Rest assured that the conversation has only just begun about this proposed megadeal.