The country’s two largest broadband cable companies are becoming one: On Thursday morning, Comcast confirmed reports that it is acquiring Time Warner Cable. The all-stock deal is worth $45.2 billion at $159 a share.
Comcast is acquiring TWC’s 11 million subscribers — who are located in “key geographic areas, including New York City, Southern California, Texas, the Carolinas, Ohio, and Wisconsin” – bringing the total number of subscribers affected to about 30 million. As Om points out, that’s not just cable customers: “The two companies together will control about half of what is called triple-play services — video, voice and internet — in the U.S.”
To alleviate antitrust concerns, Comcast said it’s “prepared to divest systems serving approximately 3 million managed subscribers…Following the transaction, Comcast’s share of managed subscribers will remain below 30 percent of the total number of MVPD subscribers in the U.S. and will be essentially equivalent to Comcast Cable’s subscriber share after its completion of both the 2002 AT&T Broadband transaction and the 2006 Adelphia transaction.” The merger is expected to close by the end of 2014.
The companies claim that, through the merger, “more American consumers will benefit from technological innovations, including a superior video experience, higher broadband speeds, and the fastest in-home Wi-Fi.” Time Warner Cable also has about 30,000 Wi-Fi hotspots, most of them in Los Angeles and New York City, and they will be combined with Comcast’s. The companies are also combining their cable technologies, meaning that Time Warner Cable customers will gain access to Comcast’s “XfinityTV.com, Xfinity TV mobile apps that offer 35 live streaming channels plus the ability to download to watch offline later, and the newly launched X1 cloud DVR.”
Yet as my colleague Stacey Higginbotham notes, things aren’t as rosy for consumers as the press release makes it sound (shocker!). “While Time Warner Cable doesn’t offer a broadband cap, after Comcast takes over, the 11 million TWC broadband subscribers are probably going to get a cap,” she wrote last night. “With such large market share, Comcast which is already the largest broadband provider, will gain even more power when it comes to dictating the terms of over a third of the nation’s broadband and TV experience.”
Time Warner and Comcast are holding an investor call at 8:30 AM ET and a call for journalists at 9:45 AM ET and we will be on the calls.