Comcast Offers to Sell 1.4 Million Subscribers to Charter Communications

Apr 28, 2014 11:52 AM EDT | Matt Mercuro

Close

Comcast has offered to sell 1.4 million pay TV subscribers to Charter Communications for $7.3 billion as part of a transaction aimed at winning approval for its takeover of Time Warner Cable.

The TWC transaction is worth $45 billion overall, according to Reuters.

Comcast also said it would divest another 2.5 million customers into a publicly traded company, called SpinCo for now, to be one-third owned by Charter and two-thirds owned by Comcast shareholders.

"Comcast wanted to do this deal now with Charter so it could get in front of regulators at the Justice Department and the FCC at the same time as the Time Warner Cable deal," a source familiar with the matter said, according to Reuters.

This deal would make Charter the second-biggest U.S. pay TV company with 5.7 million subscribers, surpassing Cox Communications.

Charter's own bid to purchase TWC was bested by Comcast's higher offer, according to Reuters.

Charter's shares increased by 10 percent to $142.70 in early trading on Monday.

Comcast shares were up 1.4 percent at $51.70.

A Comcast statement confirmed that the company would have less than 30 percent of the U.S. residential cable or satellite TV market after the deal.

The agreement is contingent on Comcast's Time Warner Cable deal being approved by the Justice Department and the U.S. Federal Communications Commission. It could take months before a deal is reached, according to Reuters.

"For Charter, this deal is a transformative event and sets them up over time to consolidate the balance of the rest of the cable industry," Pivotal Research Group analyst Jeff Wlodarczak said to Reuters.

Time Warner Cable had 11.2 million residential video subscribers as of March 31. Comcast had 22.6 million during the same time period, according to Reuters.

See Now: OnePlus 6: How Different Will It Be From OnePlus 5?

© 2020 Auto World News, All rights reserved. Do not reproduce without permission.
Get the Most Popular Autoworld Stories in a Weekly Newsletter

Join the Conversation

Real Time Analytics