The cable world just might be getting a bit smaller as the largest cable provider gets larger. According to CNBC’s David Farber (in a tweet) Comcast will announce a deal tomorrow to buy Time Warner Cable. The Wall St. Journal is also confirming the deal. Comcast is the largest US cable provider with 33 million subscribers. Time Warner Cable is number two with 12 million subscribers. Time Warner Cable had been looking at a takeover deal from Charter Communications. Time Warner had rejected each of Charter’s previous offers.
The deal is subject to US regulatory approval and the FCC will be looking closely at how this potential deal narrows the playing field and competition in a market that already leaves consumers with very little choice between providers in most markets. Comcast will pay $158.82 per share for TWC stock making the purchase price in the neighborhood of $45.2 billion dollars. Comcast has agreed to divest itself of 3 million subscribers in hopes of smoothing the regulatory scrutiny. That would keep Comcast’s total percentage of US subscribers to below 30%. With the divestiture of 3 million subscribers Comcast will have 42 million. The next three largest cable companies have 15 million combined. Comcast also owns NBC Universal, parent of the NBC broadcasting company, Universal Studios among other assets.
Curiously this news comes on a day when a reported leak/rumor of Apple being in talks with Time Warner about content deals that might show up in a new version of the Apple TV.
More will come out after the deal is announced on Thursday, so this is a moving story. We’ll post more as we have it.
UPDATES: Comcast and Time Warner confirmed the deal this morning and some things become clearer with that confirmation. The number of subscribers Comcast will obtain will be 11 million. Comcast will divest 3 million subscribers netting 8 million new subscribers to bring the total to 30 million once the deal is concluded. This will still keep them below the 30% mark of US subscribers, again, hoping to ease regulatory concerns.