Charter Communications to Acquire Time Warner Cable for $56.7 Billion

Strategic Insights -

Charter Communications is set to become the nation's second-largest broadband provider after Comcast, following its announcement to acquire Time Warner Cable (TWC) for $56.7 billion. The merged company would surpass AT&T's 16.1 million internet subscribers, with 19.4 million customers. Charter also plans to acquire Bright House Networks, a smaller cable company, further expanding its reach. This move could see Charter leapfrog AT&T to become the second-largest broadband provider in the nation.

Key Takeaways:

  • The proposed deal would make Charter the second-largest broadband provider in the nation, with 19.4 million internet subscribers, behind Comcast's 22.4 million.
  • The merged company would also have 17.3 million pay-TV customers, behind Comcast and DirecTV, as well as 9.4 million phone customers.
  • Charter expects to gain greater negotiating power over programming networks, allowing it to strike better deals for its cable TV customers.
  • The company plans to deliver superior customer care, bring faster speeds to TWC subscribers, and maintain net neutrality principles.
  • The proposed transaction does not change Charter's position in residential markets, with the company still planning to expand fiber networks for small and medium-sized businesses.
  • Charter expects to obtain regulatory approval and close the deals by the end of 2015.

Statistics:

  • Charter Communications to acquire Time Warner Cable for $56.7 billion.
  • Merged company would have 19.4 million internet subscribers, surpassing AT&T's 16.1 million.
  • Charter would have 17.3 million pay-TV customers.
  • Company would serve 23.9 million customers in 41 states after the proposed merger.
  • Charter's slowest speed tier (60Mbps downstream) is considerably faster and less expensive than TWC's comparable tiers.
  • Bright House Networking would own 13% of Charter after the proposed transaction.

Sources:

  • Charter Communications' press release announcing the deal.
  • Katy on the Hill's article on Charter's conference call with investors.
  • Comcast CEO Brian Roberts' statement in support of the proposed transaction.
  • Federal Communications Commission (FCC) Chairman Tom Wheeler's statement on the proposed merger.
  • Charter's presentation outlining its plans for improved customer care and net neutrality.