Comcast is to buy rival Time Warner Cable (TWC) in a deal worth US$45.2 billion that will bring together the two largest players in the US cable market.
The all-stock deal, which was agreed last night and was announced this morning, will see Comcast pay US$159 per-share for TWC – an approximate 17% premium over TWC’s closing share price Wednesday of US$135.
The combined company is expected to account for roughly 30 million subscribers, accounting for some 30% of the total pay TV market in the US.
Time Warner has about 12 million customers currently, and Comcast 22 million, though the merged company is expected to divest roughly 3 million subscribers to meet regulatory requirements.
News of agreement follows reports that third biggest US cable company Charter Communications had pursued TWC for months, and had unsuccessfully offered US$38 billion in cash and stock to buy the firm.
The deal, which will need US regulatory approval, is expected to close by the end of the year.