Light Reading

Comcast Strikes $45B Deal for TWC

Ray Le Maistre
2/13/2014
50%
50%

Comcast has trumped Charter by striking a $45 billion deal to acquire Time Warner Cable Inc. (NYSE: TWC). (See Comcast to Buy Time Warner Cable for $45.2B .)

Charter Communications Inc. has been courting TWC for months and in January made a cash and stock bid worth $132.50 for each TWC share in January, which was rejected.

And just days ago, Charter even unveiled how it would reshape the TWC board if it was eventually successful in its takeover bid. (See Charter Seeks to Replace TWC Board .)

Now, Comcast Corp. (Nasdaq: CMCSA, CMCSK) has stepped up with an all-stock bid that values each TWC share at $158.82, an offer that has been accepted.

The consensus appears to be that Charter would not have the financial muscle to make a better offer.

Comcast seems confident its deal wouldn't fall foul of anti-competition rules as its service areas don't overlap with those of TWC. Such a deal would, though, leave Comcast way ahead of the field as the number one player in the US cable services market, and leave Charter wondering what to do next.

Expect to hear more about this game-changing M&A move during Thursday.

— Ray Le Maistre, Editor-in-Chief, Light Reading

(23)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
Page 1 / 3   >   >>
kq4ym
50%
50%
kq4ym,
User Rank: Light Sabre
2/13/2014 | 9:30:24 PM
Re: The Litmus Test
While the consumer may not feel the effects immediately, it's not going to be smooth sailing for those who will be left with no competitive services to choose from. Whether the government will decide in favor of the deal is another matter. But, recent approvals seems to indicate there may be no objection. It will be history that decides the wisdom of large companies taking what actually amounts to a monopoly interest.
dwx
50%
50%
dwx,
User Rank: Light Sabre
2/13/2014 | 3:57:17 PM
Re: The Litmus Test
TWC and Comcast were two of the most staunch opponents to giving OTT providers free access to their networks, so in those regards not much changes.   They just have a bigger bargaining chip with more customers, and I agree it's the content owners who are going to make the most noise over this.  

I'm curious if Comcast plans on keeping ahold of the entire TW footprint or selling off portions to other MSOs who have adjacent footprints.  

Comcast is ahead of the game when it comes to true IP video.  I think it's a win for TWC subscribers if they will have access to Comcast's newer video products, well at least those looking for more cutting edge products.  Most are like my parents and just want their TV to work without much hassle. :) 
mendyk
50%
50%
mendyk,
User Rank: Light Sabre
2/13/2014 | 1:10:30 PM
Re: The Litmus Test
The Rule of 3 (as in the number of mobile operators a market can support) has proven out time and again in lots of national markets. So one way or the other, past performance indicates that if T-Mobile and Sprint don't come together, one of them will fall away or at least fade into Tier 3 status (as in, "Our customer base is now made up entirely of people who read The Nation"). Pro-competition fans don't like that but it's just the way things have worked and most likely will continue to work. Our regulators seem to be completely oblivious to this established reality.
brookseven
50%
50%
brookseven,
User Rank: Light Sabre
2/13/2014 | 12:53:27 PM
Re: The Litmus Test
Dennis,

I agree with your point here, which is essentially that the consumer landscape does not directly change.

What I think does change are the eco-systems around this which folks have been directly commenting on.  

The wireless merger is backwards and my big concern with NOT doing it is do T-Mobile/Sprint survive separately?  I love the notion of a 4 player field, but a 3 player field with long term survivability seems better to me.

Back to the eco-system thing, I think shareholders will win in the long term since this is essentially a land grab.  There will be short to medium term losses but essentially we will scrap 1 G&A department, some executives, and get a better deal on purchasing in NewCo.  I think that the notion of the single largest ISP by quite a long way is troubling.

seven

 
mendyk
50%
50%
mendyk,
User Rank: Light Sabre
2/13/2014 | 11:45:01 AM
Re: The Litmus Test
On the positive side, this can only help to accelerate the move to OTT.
mendyk
50%
50%
mendyk,
User Rank: Light Sabre
2/13/2014 | 11:42:16 AM
Re: The Litmus Test
Yes, that's what economies of scale is all about. In reality, merged companies have a very hard time actually getting to the point where their efficiency plans come to fruition. And we are in an economic environment that cares not one whit about individual job security, merger or no merger. I'll go back to the original point -- single ownership of properties that already are de facto monopolies (as in, there's little or no on-the-ground competition between cable operators) won't have much of an impact on the video/broadband market.
Phil_Britt
50%
50%
Phil_Britt,
User Rank: Light Sabre
2/13/2014 | 11:41:11 AM
Re: The Litmus Test
A financial analyst pointed out that the biggest complaints may not come from consumers or from other cable/satellite providers, but instead from content providers like CBS and Disney. With Comcast/NBC/Time Warner all together, it would be the behemoth in content and have the majority of the distribution capability as well.
craigleddy
50%
50%
craigleddy,
User Rank: Blogger
2/13/2014 | 11:35:03 AM
Re: The Litmus Test
Oh, I thought I was being polite by saying "nonsense" and not something harsher. :) I guess I've witnessed too many merger announcements containing false promises.

Comcast and TWC are indeed both pursuing this centralization strategy, but the merger could take it to an even larger scale with potential impact on more employees, unless that non-overlap promise is put in stone.

 
mendyk
50%
50%
mendyk,
User Rank: Light Sabre
2/13/2014 | 11:24:28 AM
Re: The Litmus Test
Are you saying that they wouldn't do this without the merger? I'm not sure where the nonsense crack comes from -- seems a bit harsh.
craigleddy
50%
50%
craigleddy,
User Rank: Blogger
2/13/2014 | 11:19:11 AM
Re: The Litmus Test
Au contraire on the point about employees and consumers.

The notion that Comcast and TWC properties will be operated separately without overlap is nonsense (unless their non-overlap promises are codified by regulators). One of the key strategies of Comcast (and TWC) in embracing IP-based distribution is to centralize operations in as few locations as possible, essentially around content delivery networks (CDNs) and regional data hubs. Carried out on a larger national scale this significantly reduces the need for local operations and employees.

The IP strategy also poses enormous operational challenges (billing, customer service, provisioning etc) which, if done on an even larger scale and not executed properly, will rain down on customers' heads. (Not to mention that the easiest way for a large broadband provider to increase revenue is through rate increases.) Comcast's IP vision is brilliant but the company still has issues with execution, as far too many Comcast customers know.    
Page 1 / 3   >   >>
Flash Poll
From The Founder
The New IP is actually bigger even than business. Like another hugely important tech that Light Reading is digging into right now, the New IP has the potential to change the world by fundamentally advancing what it is possible for people to achieve with communications.
LRTV Interviews
In the Cloud With Telecom Italia

3|5|15   |   7:10   |   (0) comments


Light Reading CEO Steve Saunders sits down with Telecom Italia's Simone Battiferri at Mobile World Congress to discuss virtualization, agility and the economic advantages of the cloud.
LRTV Huawei Video Resource Center
New Ways of Working

3|5|15   |   4:24   |   (0) comments


At the ICT Leaders Roundtable, hosted jointly by Light Reading and Huawei at the Hotel Renaissance in Barcelona just prior to Mobile World Congress, Hong Kong Telecom's Michael Yue explains how the transformation in its business has changed its customer relationships.
LRTV Huawei Video Resource Center
Bridging the Digital Gap

3|5|15   |   4:03   |   (0) comments


At the ICT Leaders Roundtable, hosted jointly by Light Reading and Huawei at the Hotel Renaissance in Barcelona just prior to Mobile World Congress, Boingo's Dr. Derek Peterson explains how ICT can help telcos bring the physical and virtual worlds closer together.
LRTV Huawei Video Resource Center
Making the Internet of Things Affordable

3|5|15   |   2:42   |   (0) comments


At the ICT Leaders Roundtable, hosted jointly by Light Reading and Huawei at the Hotel Renaissance in Barcelona just prior to Mobile World Congress, Telefonica's Dr. Mike Short explains how the Internet of Things demands a new low-cost approach to connectivity from telcos.
LRTV Huawei Video Resource Center
Evolution, Not Revolution

3|5|15   |   2:00   |   (0) comments


At the ICT Leaders Roundtable, hosted jointly by Light Reading and Huawei at the Hotel Renaissance in Barcelona just prior to Mobile World Congress, Heavy Reading's Patrick Donegan explains why telcos can't be too hasty in their efforts to transform themselves.
LRTV Custom TV
Management & Orchestration Enablement Strategies Required for NFV Commercial Success

3|5|15   |   6:22   |   (0) comments


NFV commercial success rests on successful service orchestration strategies which can span heterogeneous physical, virtual, legacy and next-gen networks. Network data and security integrity are additional key aspects. Nakina provides a suite of orchestratable network integrity applications built on an open, scalable MANO enablement platform.
LRTV Huawei Video Resource Center
The Power of Five Convergences in OceanStor OS

3|4|15   |   6:24   |   (0) comments


OceanStor OS is Huawei's brand-new storage operating system. While inheriting the consistent high stability, reliability and performance from the company's previous storage products, OceanStor OS abounds in new converged storage features. Specifically, the new storage operating system achieves "five convergences" to lift storage convergence to a higher level.
LRTV Huawei Video Resource Center
4K Brings Extreme Video Experience

3|4|15   |   8:10   |   (0) comments


4K video is a hot topic in the video industry. It will certainly bring an extreme video experience to end users. At the same time, however, it will also pose a big challenge to operators. Check out this Huawei 4K experts' discussion about how operators can achieve success in 4K video service.
LRTV Interviews
DT's Virtualization Vision for Europe

3|4|15   |   10:23   |   (0) comments


Light Reading CEO Steve Saunders talks virtualization, cloudification and standards with Deutsche Telekom's Axel Clauberg at Mobile World Congress.
LRTV Custom TV
ZTE's Wireline at MWC 2015

3|4|15   |   6:35   |   (0) comments


Light Reading speaks with Jane Chen, ZTE's Senior VP of Wireline Business, about innovations in her product line at Mobile World Congress.
LRTV Custom TV
ZTE at MWC 2015

3|4|15   |   4:24   |   (0) comments


Dr. Dick Chen of ZTE USA gives Light Reading an overview of what's new at ZTE's pavilion at Mobile World Congress 2015.
LRTV Interviews
Ericsson CEO Talks Telco Data Center Tech

3|4|15   |   05:45   |   (1) comment


At Mobile World Congress, Ericsson CEO Hans Vestberg discusses telco data center technology, business models, small cells and more.
Upcoming Live Events
March 17, 2015, The Cable Center, Denver, CO
April 14, 2015, The Westin Times Square, New York City, NY
May 12, 2015, Grand Hyatt, Denver, CO
May 13-14, 2015, The Westin Peachtree, Atlanta, GA
June 8, 2015, Chicago, IL
June 9-10, 2015, Chicago, IL
June 9, 2015, Chicago, IL
June 10, 2015, Chicago, IL
All Upcoming Live Events
Infographics
Net neutrality, broadband services and the current outlook on data consumption, as presented by the New Jersey Institute of Technology.
Hot Topics
Internet Pioneers Decry Title II Rules
Carol Wilson, Editor-at-large, 3/2/2015
Wheeler: We'll Enforce Title II 'Case-By-Case'
Sarah Thomas, Editorial Operations Director, 3/3/2015
New CenturyLink CTO in Major Overhaul
Carol Wilson, Editor-at-large, 3/4/2015
Verizon Takes Radio Dot to Detroit, VoLTE Overseas
Sarah Thomas, Editorial Operations Director, 2/27/2015
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Light Reading CEO Steve Saunders talks transformation and virtualization – including Light Reading's independent testing of the vendor's virtualization solutions – with Cisco CEO John Chambers at Mobile World Congress in Barcelona.
Check out Light Reading's interview with Jay Samit, the newly appointed CEO of publicly traded SeaChange International Inc. With a resume that includes Sony, EMI, and Universal, Samit brings a reputation as an entrepreneur and a disruptor to his new role at the video solutions company. Hear what he had to say about the opportunities in video, as well as the outlook for cable, telco, OTT and mobile service providers.