Upon completion of the deal, Charter will become the second-largest cable operator in the US. Bright House is the sixth largest cable operator in the US with approximately 2 million video customers in central Florida, Indiana, Michigan, Alabama and California.
The business will be conducted through a partnership of which Charter will own 73.7% and Advance/Newhouse – the parent company of Bright House Networks – will own 26.3%.
In addition, Liberty Broadband has agreed to purchase $700 million of shares in the combined entity, with an equity ownership of 19.4% of the outstanding shares, of which 26.3% will be owned by Advance/Newhouse.
Advance/Newhouse has also agreed to grant Liberty Broadband a voting proxy on its shares, capped at 6%, for five years after the close of the transaction, such that Liberty Broadband would have voting power of approximately 25% at closing.
The deal, the latest in a wave of consolidation in the cable market in the US, is contingent on the completion of Comcast’s $45 billion takeover of Time Warner Cable.
