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: Can you spell near monopoly?
2/13/2014 9:07:16 AM
Don't worry, you always have the option to not have cable at all. I'm beginning to think that's the only reasonable option.
RE: Can you spell near monopoly?
2/13/2014 9:55:38 AM
Well, there is satellite or the offerings from the phone companies. My biggest issue is not the delivery of cable, but the fact that Comcast owns the content. To me, that would be like the car companies owning the oil companies and then making vehicles that get 1 MPG.
How much more content will Comcast own after this? Will this cause issues with D*TV, Dish, Uverse and FiOS being able to provide content on the same playing field.
"Well, we didn't have anyone in line that got shot waiting for our system." -- Nintendo of America Vice President Perrin Kaplan
"Vampire" Mobile Media is Killing Cable TV -- Or Is It?
November 25, 2013, 9:40 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
Call-capable Samsung Gear S Smartwatch Launches Nov 7 in U.S.
October 30, 2014, 12:45 PM
Lenovo Completes $2.91B Acquisition of Motorola
October 30, 2014, 11:57 AM
Samsung Electronics Q3 Profit Falls by 60%, Mobile Division Sees 74% Profit Decline
October 30, 2014, 10:10 AM
Microsoft's $199 Fitness Band Packs in 10 Sensors, Works with Windows Phone, iOS, and Android
October 30, 2014, 8:58 AM
Google’s Project Ara Modular "LEGO" Smartphone Shown Booting Up on Video
October 29, 2014, 5:28 PM
After Touting Security, Privacy Controls, MCX/CurrentC Hack Exposes Customer Email Addresses
October 29, 2014, 3:08 PM
Most Popular Articles
Amid Theater Boycott Netflix Defiantly Plans New Movies, Plus 3 TV Shows for 2015
October 24, 2014, 7:30 PM
AT&T Defeats Purpose of New Apple SIM, Locks iPad Air 2 SIMs to Its Network
October 24, 2014, 2:17 PM
CVS, Rite Aid Kill Unofficial Apple Pay Support, Burn Google Wallet Users in the Process
October 25, 2014, 5:26 PM
1 Million Credit Card Activated on Apple Pay Within 72 Hours, Walmart CEO Hopes Visa "Suffers"
October 28, 2014, 8:17 AM
Microsoft's Figures Show Desktop Users Flocking to Windows 10 Preview
October 27, 2014, 11:04 AM
Latest Blog Posts
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
Space Terrorism is a Looming Threat For the United States
Apr 23, 2014, 7:47 PM
More Blog Posts
Copyright 2014 DailyTech LLC. -
Terms, Conditions & Privacy Information