Charter to Buy Time Warner Cable

Last month, Comcast (CMCSK) pulled out of its deal to buy Time Warner Cable (TWC). The regulatory hurdles were apparently too much to bear. At the time, I said this clears the way for Charter Communications (CHTR). Today, Charter made it official.

Charter Communications agreed on Tuesday to buy its much larger rival Time Warner Cable for $56.7 billion in a deal that would transform the company into one of America’s largest cable and broadband operators.

The announcement represents the latest in a flurry of takeovers in the sector as companies struggle to keep pace with changes in how Americans watch and pay for television. As customers increasingly stream videos through the Internet, cable providers have sought deals to gain scale and greater bargaining power with content providers.

The multibillion-dollar offer also marks a culmination for Charter and its main backer, the 74-year-old billionaire media mogul John C. Malone, who will have transformed Charter from a small operator born in St. Louis in 1993 into the country’s second-largest cable company, behind Comcast.

This is a deal made out of fear. When the first deal was announced, TWC was at $135. Now it’s at $170.

Posted by on May 26th, 2015 at 9:36 am

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