Time Warner Cable CEO Says Merger with Comcast is a "Dream Combination", Will Increase Innovation
March 12, 2014 2:37 PM
He's also confident the deal will close
While some remain unsure of what Comcast's acquisition of Time Warner Cable (TWC) will mean for the industry, TWC's CEO has no doubt the deal between both companies is a "dream combination."
, TWC CEO Rob Marcus said the merger will mean increased innovation and efficiency in the cable industry.
“Look, I have every confidence that this deal is going to close. The logic of the deal is so compelling. I really don’t see anything undermining that,” said Marcus.
Not everyone shares that same point-of-view. Some worry that the merger will result in reduced competition, poor customer service, less innovation and higher prices for customers.
These worries stem from analyst predictions that Comcast and TWC's combined company would control about one-third of the U.S. broadband market.
But Marcus dismissed the negatives, saying that Comcast and TWC don't directly compete in any markets -- hence, competition would remain unchanged. He also defended the merger from accusations that customers would pay more in the end.
“I find that whole line to be totally ironic given the experience we’ve all had over the last dozen years, where (programming) costs have risen faster than the cost customers will bear," said Marcus.
TWC is raising prices on its own before the Comcast acquisition, saying it's offering more "customer friendly" cost increases by upping their bills once a year instead of as much as three times per year.
Comcast confirmed its
acquisition of TWC for $45.2 billion USD
in mid-February. It's set to be an all-stock transaction.
The deal, which should be completed by the end of 2014 (after approval by stockholders and regulators, of course), will give TWC investors 2.875 Comcast stock for each of their shares. TWC shares are valued at $158.82 a piece.
TWC shareholders will own about 23 percent of Comcast’s common stock, and the press release said Comcast plans to buy back an additional $10 billion of its shares.
The deal will up Comcast’s free cash flow per share and produce savings of about $1.5 billion. The overall acquisition values TWC at at about $69 billion including net debt.
It was revealed yesterday that Comcast used its political action committee to
pay millions of dollars in lobbying
, which paid many lawmakers responsible for overseeing the acquisition. The company even made donations to charities in an effort to put itself in a favorable light.
Comcast reportedly gave 15 of the 18 members of the Senate Judiciary Committee as well as 32 of the 39 members of the House Judiciary Committee some type of compensation or donation. Both committees are due to partake in hearings regarding the Comcast deal.
"So if you want to save the planet, feel free to drive your Hummer. Just avoid the drive thru line at McDonalds." -- Michael Asher
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