Time Warner Cable and Charter Communications announced Tuesday that they had reached a merger deal.
If the deal is completed, the new company would become a major rival to Comcast Corp. As we reported, Comcast and Charter had already made earlier bids to buy Time Warner, but Charter was outbid by Comcast and the Comcast deal fell apart after the Justice Department and the Federal Communications Commission raised concerns that it would lead to an anti-competitive environment.
According to The Wall Street Journal's math, this deal is valued at $55 billion and it gives cable mogul John Malone "the prize he has been chasing for two years."
The Journal reports:
"The acquisition by Charter, which is backed by Mr. Malone's Liberty Broadband Corp., would vault the cable operator into the ranks of the biggest U.S. broadband and pay-television companies.
"The firms have agreed to terms for a cash-and-stock deal that would value Time Warner Cable at $195 a share, according to people familiar with the matter."
"'The idea that Time Warner Cable and Charter are merging isn't a surprise, but the price raises some eyebrows,' Craig Moffett, an analyst at MoffettNathanson in New York, said May 24 after Bloomberg News reported a deal was near. ...
"The Time Warner Cable deal enables Charter, whose largest shareholder is billionaire John Malone, to almost quadruple its number of cable subscribers, gaining 12 million customers in cities including New York, Los Angeles and Dallas."