Charter will pay $195.71 a share for the cash-and-share deal, with options of $100 and $115 in cash and the rest in shares. Including TWC’s debt, the deal is valued at $78.7 billion.
Charter has also reached an agreement with Advance/Newhouse toacquire Bright House Networks for $10.4 billion. The company will be merged with newly-created parent company New Charter.
The combination of Charter, TWC and Bright House will create the second largest cable operator in the US with 23.9 million customers in 41 states, next to Comcast’s 272.2 million. Charter’s CEO Tom Rutledge will continue to lead the group.
"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. In addition, we will drive greater competition through further deployment of new competitive facilities-based Wifi networks in public places, and the expansion of the facilities footprint of optical networks to serve the large, small and medium sized business services marketplace,” said Rutledge.
“Put simply, the scale of New Charter, along with the combined talents we can bring to bear, position us to deliver a communications future that will unleash the full power of the two-way, interactive cable network."
To help fund the deal, Liberty Broadband, controlled by billionaire John Malone and Charter’s largest shareholder, will buy $4.3 billion of new shares in Charter.
Upon completion of the deals, shareholders of TWC – excluding Liberty Broadband and its affiliates – are expected to own approximately between 40%-44% of New Charter; Advance/Newhouse is expected to own between 13-14% of New Charter and Liberty Broadband will hold 19%-20%.
Shortly after the announcement of the planned deal, Tom Wheeler, chairman of the US Federal Communications Commission (FCC), issued a statement saying the commission will evaluate how consumers would benefit from the deal.
“The FCC reviews every merger on its merits and determines whether it would be in the public interest,” he said.
