Market Leader Comcast to Purchase 2nd Place Time Warner Cable for $45.2B
February 13, 2014 12:08 AM
comment(s) - last by
Why compete when you can just merge and name you own prices?
Comcast Corp. (
) is expected to on Thursday officially announce a mind-blowing deal, which would mark the biggest consolidation in over a decade in
the cable television
and broadband internet market, if allowed. Comcast's bid will reportedly slot in at $159 USD per share of Time Warner Cable (
) stock, making the deal worth just over $45 billion.
The New York Times
are all reporting that the deal will be announced tomorrow. And most tellingly, NBC News -- whose parent company is owned by Comcast --
also is reporting
the deal will become official on Thursday.
The deal would create a market behemoth, merging together the first and second place competitors in both the TV and broadband internet markets.
Comcast has roughly a 25 percent share of the broadband market; TWC controls around 12 percent of the market [
]. Comcast currently controls roughly 19 percent of subscription cable TV market; TWC controls around 9 percent of it. Together the pair would control roughly a third (37 percent of broadband; 28 percent of cable TV) of two vital U.S. communications markets.
On a local scale the deal would be a massive win for Comcast and a massive loss for consumers, who would see scarce competition (Time Warner Cable vs. Comcast) reduced to none.
In all likelihood the deal will face lawsuits from the
U.S. Federal Communications Commission
(FCC) and the
U.S. Department of Justice
(DOJ) on antitrust grounds.
The Motley Fool
writer Anders Byland
wrote about this possibility
back in November 2013, when the bid was just a rumor. He titled his piece "The Time Warner and Comcast Merger Can't Happen. Here's Why."
In it he writes:
I would advise you not to hold your breath awaiting this business combination. Here's why.
Having Time Warner join forces with Comcast would create a massive cable operator. I mean an industry giant of epic proportions. Comcast serves nearly 22 million video subscribers, and Time Warner is No. 2 in the cable TV industry, with more than $11 million customers. The third-largest cable service provider is Cox Communications, with just 5.4 million households to its name.
You see the problem, right? In a total TV service market of 116 million households, including satellite subscribers and rabbit-ear antennae, Comcast wants to grow its market share from 19% to 28% in one fell swoop.
I don't think our regulatory bodies are going to like that idea.
Comcast's deal -- which it plans to do with all stock and no cash -- is slightly less than than the $160 USD/share price that TWC customers were targeting. But it's much better than $133 USD/share from Charter Communications Inc. (
), an offer which TWC
in mid-January. That deal would have perhaps stood more of a chance with regulators, though, given that Charter actually has fewer subscribers than TWC (or Comcast).
[Image Source: Reuters]
Unless federal regulators are asleep, this deal will almost certainly face far stiffer opposition. Comcast isn't exactly best friends with the FCC, which will likely work against it. The broadband provider famously
fought to kill federal regulators' net neutrality rules
in an appeals court.
Sources close to Comcast say it will divest 3 million cable subscribers (or about a tenth of the combined company's subscriptions). That's a small gesture, but it's probably not even on par with the measures AT&T, Inc. (
willing to concede
to had the DOJ and FCC
agreed to allow it eliminate/gobble up
its competitor T-Mobile USA (a Deutsche Telekom AG (
) subsidiary) in a similar deal. And we all know
how that story ended
The New York Times
This article is over a month old, voting and posting comments is disabled
RE: Wait they're not the same company??
2/13/2014 2:07:25 AM
They both do share the same family values... if that is what you mean.
RE: Wait they're not the same company??
2/13/2014 2:58:43 AM
well, there was AOL and Warner broadcasting, and they got sucked in to the mess, because, well, they could not compete. Comcast has obliterated its competition... and now.. this really puts a clog into the broadcasting sector.
Personally I cannot stand Comcast and despise their business, but I wonder if it could be time to ninja grab a bit of their stock. Or drop it like its hot. 50/50?
"I want people to see my movies in the best formats possible. For [Paramount] to deny people who have Blu-ray sucks!" -- Movie Director Michael Bay
"Vampire" Mobile Media is Killing Cable TV -- Or Is It?
November 27, 2013, 9:24 AM
AT&T Tucks Its Tail Between Its Legs, Abandons T-Mobile Acquisition
December 19, 2011, 4:50 PM
DOJ Files Paperwork to Kill AT&T/T-Mobile Merger; AT&T, Sprint Respond
August 31, 2011, 11:21 AM
AT&T to Buy T-Mobile for $39 Billion USD
March 20, 2011, 2:52 PM
U.S. Federal Court Rules FCC Can't Stop Comcast From Throttling Traffic
April 7, 2010, 11:23 AM
Retiree Sues Apple For $7,500 for Wiping Honeymoon Photos From His iPhone
November 30, 2015, 10:23 AM
iPhone 7 May Pack 3-4 GB Memory, More Storage; 4-Inch Comeback is Rumored
November 20, 2015, 10:12 PM
OnePlus One, OnePlus 2 Will Receive Android Marshmallow in Q1 2016
November 16, 2015, 9:58 AM
Lenovo Whoa: Motorola Droid MAXX 2 and Turbo 2 Break Cover in Leaks
October 26, 2015, 3:12 PM
Leak: Apple Preps for First Real Android App Foray With New Apple Music App
October 24, 2015, 1:59 PM
Pepsi Smartphone? Empty Calories Coming Soon to the Midrange
October 12, 2015, 11:41 PM
Latest Blog Posts
Sceptre Airs 27", 120 Hz. 1080p Monitor/HDTV w/ 5 ms Response Time for $220
Dec 3, 2014, 10:32 PM
Costco Gives Employees Thanksgiving Off; Wal-Mart Leads "Black Thursday" Charge
Oct 29, 2014, 9:57 PM
"Bear Selfies" Fad Could Turn Deadly, Warn Nevada Wildlife Officials
Oct 28, 2014, 12:00 PM
The Surface Mini That Was Never Released Gets "Hands On" Treatment
Sep 26, 2014, 8:22 AM
ISIS Imposes Ban on Teaching Evolution in Iraq
Sep 17, 2014, 5:22 PM
More Blog Posts
Copyright 2016 DailyTech LLC. -
Terms, Conditions & Privacy Information