Comcast Corp. and Time Warner Cable Inc. agreed to sell units serving a combined 3.9 million clients to Charter Communications Inc. for $7.3 billion to reduce their market share as the two largest U.S. cable companies merge.
Charter will acquire 1.4 million existing Time Warner Cable customers to become the second-largest cable operator in the U.S., the companies said today in a statement. Charter is forming a company that will acquire a 33 percent stake in a spinoff from Comcast that will pick up 2.5 million Comcast customers, they said.
“These transactions enable us to deliver meaningful value to our shareholders,” Comcast Chief Executive Officer Brian Roberts said in the statement. “The realignment of key cable markets achieved in these transactions will enable Comcast to fill in our footprint and deliver operational efficiencies and technology improvements.”
The $45 billion offer by Philadelphia-based Comcast for New York-based Time Warner Cable in February prompted questions this month from U.S. lawmakers about potential antitrust issues. Comcast outbid Charter in the deal, and the Stamford, Connecticut-based suitor urged Time Warner investors not to accept the purchase.
The disposal announced today will reduce the combined residential market share to less than 30 percent, the companies said. Comcast reiterated that cost savings from combining with Time Warner Cable will total about $1.5 billion.
Charter also captured more TV customers on its own in the first quarter, adding 206,000 residential subscribers in the period, it said in a separate statement today.
Residential video customers grew by 18,000. Chief Executive Officer Tom Rutledge has envisioned expanding through acquisitions to help the cable company negotiate for better deals on programming and boost profit as the pool of potential customers in the country shrinks.
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