Wednesday night, reports surfaced on CNBC regarding one of the biggest acquisition/mergers in entertainment with Comcast Corporation purchasing their multinational media rival, Time Warner Cable. Comcast CEO/Chairman, Brian Roberts released a statement regarding the move as “pro-creative and pro-consumer,” which will now end previous and future potential blackouts of CBS and Showtime for now-former Time Warner customers.
Comcast President Neil Smit will now be heading the new company, as they’re awaiting final clearance from the federal government (which should be official in the coming days). With Netflix, Hulu Plus and now Apple TV causing satellite and cable subscriptions to decrease drastically in recent years, the Time Warner fold was imminent following the Xfinity roll-out and takeover in 2010. Comcast still currently owns the crown for most consumers in cable markets; but with the emergence of AT&T U-Verse and Verizon FiOS, the new partnership will hinder any threats from losing their top spot in households for the time being.
Check after the jump for video coverage and more details with a press release.
Comcast Corporation (Nasdaq: CMCSA, CMCSK) and Time Warner Cable (NYSE: TWC) today announced that their Boards of Directors have approved a definitive agreement for Time Warner Cable to merge with Comcast. The agreement is a friendly, stock-for-stock transaction in which Comcast will acquire 100 percent of Time Warner Cable’s 284.9 million shares outstanding for shares of CMCSA amounting to approximately $45.2 billion in equity value. Each Time Warner Cable share will be exchanged for 2.875 shares of CMCSA, equal to Time Warner Cable shareholders owning approximately 23 percent of Comcast’s common stock, with a value to Time Warner Cable shareholders of approximately $158.82 per share based on the last closing price of Comcast shares. The transaction will generate approximately $1.5 billion in operating efficiencies and will be accretive to Comcast’s free cash flow per share while preserving balance sheet strength. The merger will also be tax free to Time Warner Cable shareholders.
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