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You are here: Home / World Wide Web / Charter Buys Time Warner for $79B
Charter Inks Deal To Buy Time Warner for $79 Billion
Charter Inks Deal To Buy Time Warner for $79 Billion
By Jennifer LeClaire / CRM Daily Like this on Facebook Tweet this Link thison Linkedin Link this on Google Plus
Comcast’s $45 million bid to buy Time Warner Cable failed in April -- but Charter Communications was right there waiting to swoop in. Charter plans to merge with Time Warner in a deal that values the company at $78.7 billion.

But Charter didn’t end its shopping spree there. In the same announcement, the company said it would acquire Bright House Networks for $10.4 billion and shell out another $4.3 billion to buy out Liberty Broadband Corporation. The company is rebranding itself as New Charter.

“New Charter will capitalize on technology to create and maintain a more effective and efficient service model,” said Tom Rutledge, President and CEO of Charter Communications. “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."

Big Promises

If the Federal Communications Commission (FCC) actually approves all the deals, Charter will ultimately serve 23.9 million customers in 41 states, promising faster speeds, wider Wi-Fi deployment in public spaces, an expansion of optical networks, more high-definition channels, better video products, and more affordable phone service.

"This agreement recognizes the unique value of Time Warner Cable, and brings together three great companies that share a common philosophy of strong operations, great products, robust network investment and putting customers first,” said Robert Marcus, chairman and CEO of Time Warner Cable. “This combination will only accelerate the great operating momentum we've seen over the last year and provide enormous opportunities for our 55,000 dedicated employees.”

Rutledge will serve as president and CEO of New Charter under a five-year employment agreement. At the close of the transactions, New Charter's board of directors will consist of 13 directors, including Rutledge, who will serve as chairman.

Better Chance

But will the deal make it through the FCC? When FCC Chairman Tom Wheeler had serious concerns that the Comcast-Time Warner Cable merger risks outweighed benefits to the public interest, the companies put the kibosh on the deal.

Wheeler feared a merger would have created a company with the most broadband and video subscribers in the nation alongside the ownership of significant programming interests. It was just too much power for one company. Is this deal any different?

We caught up with Jeff Kagan, an independent technology analyst, to get his thoughts on the merger. He told us he expected this deal after the Comcast Time Warner Cable deal died.

“This is what John Malone from Charter was waiting for. I think the chances of this Charter-TWC deal being approved have much better odds than the Comcast-TWC version,” Kagan said. “This will quickly grow Charter to a strong second place competitor to Comcast. This has no threats to the marketplace. So I expect approval and in fact pretty quick approval unless something comes up.”

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