General

Hmmm… not much happening out there today — WAITASECOND!

Comcast Corporation (Nasdaq: CMCSA, CMCSK) and Time Warner Cable (NYSE: TWC) today announced that their Boards of Directors have approved a definitive agreement for Time Warner Cable to merge with Comcast. The agreement is a friendly, stock-for-stock transaction in which Comcast will acquire 100 percent of Time Warner Cable’s 284.9 million shares outstanding for shares of CMCSA amounting to approximately $45.2 billion in equity value. Each Time Warner Cable share will be exchanged for 2.875 shares of CMCSA, equal to Time Warner Cable shareholders owning approximately 23 percent of Comcast’s common stock, with a value to Time Warner Cable shareholders of approximately $158.82 per share based on the last closing price of Comcast shares. The transaction will generate approximately $1.5 billion in operating efficiencies and will be accretive to Comcast’s free cash flow per share while preserving balance sheet strength. The merger will also be tax free to Time Warner Cable shareholders.

This transaction will create a leading technology and innovation company, differentiated by its ability to deliver ground-breaking products on a superior network while leveraging a national platform to create operating efficiencies and economies of scale.

Comcast and Time Warner Cable are the two biggest cable providers in America, so of course this proposed deal is going to receive heavy scrutiny. As The Hill‘s Kate Tummarello writes:

The deal would bring Comcast’s total number of subscribers to 30 million, with the company gaining 8 million subscribers from Time Warner. But as a part of the deal, Comcast also agreed to sell off systems that serve 3 million subscribers.
Top antitrust lawmakers vowed to examine the acquisition closely.

In a statement, Sens. Amy Klobuchar (D-Minn.) and Mike Lee (R-Utah) — chairwoman and ranking member of the Senate Commerce’s Subcommittee on Antitrust — said they will hold a hearing on the proposed merger.

“This proposed merger could have a significant impact on the cable industry and affect consumers across the country,” Klobuchar said, adding that she will “carefully scrutinize the details of this merger and its potential consequences for both consumers and competition.”

This is going to be a long regulatory battle, so buckle up. The full Comcast statement about the deal is here.