DOJ gets Comcast-TWC review


DOJ / Department of JusticeIt looks like the Justice Department won the tug-of-war with the Federal Trade Commission over who will oversee the Comcast-Time Warner Cable deal, knowledgeable sources tell Politico. “Deciding which agency gets to oversee the $45.2 billion deal is the first step the government has to take as it begins its review of the merger. DOJ was seen as the best fit for the review since it handled Comcast’s acquisition of NBCUniversal. Comcast executives plan to file their merger documents with DOJ, and their public interest statement with the FCC, near the end of March. That’s about the same time that the companies will go before the Senate Judiciary Committee for a hearing.”

Comcast will buy Time Warner Cable for $45.2 billion in stock, or $158.82 per share, in a deal that would combine the nation’s top two cable TV companies. TWC had wanted $160.00 per share, so this price came pretty close. The price beats a recent, rejected proposal by Charter Communications to buy Time Warner for about $132.50 per share, or $38 billion in cash and stock.

The deal was approved by the boards of both companies and, pending regulatory approval, is expected to close by the end of the year.

Time Warner Cable shareholders will receive 2.875 Comcast shares for every Time Warner Cable share they own. Once the deal is final, they will end up owning about 23% of the combined company.

The new cable company will be led by President and CEO Neil Smit. Smit is currently President and CEO of Comcast Cable and EVP of Comcast Corp.

Through the merger, Comcast will acquire Time Warner Cable’s approximately 11 million managed subscribers. In order to reduce competitive concerns, Comcast is prepared to divest systems serving approximately 3 million managed subscribers. As such, Comcast will, through the acquisition and management of Time Warner Cable systems, net approximately 8 million managed subscribers in the deal. This will bring Comcast’s managed subscriber total to 30 million. Following the transaction, Comcast’s share of managed subscribers will remain below 30% of the total number of MVPD subscribers in the U.S. and will be essentially equivalent to Comcast Cable’s subscriber share after its completion of both the 2002 AT&T Broadband transaction and the 2006 Adelphia transaction, noted the company in a release.

See the Politico post here.