SAN FRANCISCO
Charter Communications announced Tuesday that it will buy Time Warner Cable for $56.7 billion in a move that will shake up the turbulent cable broadcasting industry.
Charter’s purchase of its significantly larger rival Time Warner will affect one in six Americans and will be the biggest merger in the United States in 2015, beating condiment-maker Heinz’s $40 billion purchase of Kraft Foods in March. The combined cable company will be the second-largest cable provider in the U.S., behind only Comcast.
Charter also purchased competitor Bright House Networks for $10.4 billion. After the mergers, Charter will serve 24 million customers, roughly raising the company’s customer base four-fold.
"The teams at Charter, Time Warner Cable and Bright House Networks are filled with the innovators of our industry,” Tom Rutledge, president and CEO of Charter, said in a statement. “Representatives of each of these companies have invented some of the most revolutionary communications products ever created; innovations like video on demand, VOIP phone service, remote storage DVR, cable TV through an app, downloadable security and the first backward-compatible, cloud-based user interface.”
Charter will pay Time Warner investors $195.71 per share in a cash-and-stock deal that values the latter at $78.7 billion – 14 percent increase from its closing price last Friday. Tuesday afternoon, Charter stock was hovering around $180 per share while Time Warner Cable stock closed at $183.56.
Comcast, the largest cable provider in the country with 27 million customers, tried to buy Time Warner in early 2014 but the bid fell through after regulatory scrutiny.
If Tuesday's deal earns regulatory approval, the combined company will be called New Charter and will provide services under the brand name Spectrum.
“With our larger reach, we will be able to accelerate the deployment of faster Internet speeds, state-of-the-art video experiences, and fully featured voice products, at highly competitive prices,” Rutledge said.
