Comcast has announced plans to acquire Time Warner Cable in a stock-for-stock transaction that would total $45.2 billion. The transaction would involve Comcast exchanging 23 percent of its stock, valued at $55.12, for 284.9 million shares of Time Warner Cable stock, valued at $158.82.
The merger would open up new areas for Comcast since neither company overlaps each other and giving it access to areas such as New York City, Texas, Southern California, and North and South Carolina. In addition, Comcast would have access to around 11 million new subscribers from Time Warner Cable. However, the company plans to divest three million of those subscribers to allay competitive concerns. If such a thing occurs, Comcast’s total number of subscribed users would amount to around 30 million once the acquisition takes place.
According to Comcast, the merger is expected to close by the end of 2014 pending approval between both companies’ shareholders and regulatory review. However, the merger could be stopped by either the Department of Justice or the Federal Communications Commission, given that Comcast would have around 30 percent of paid TV subscribers in the US.
Should the DoJ or FCC stop Comcast's acquisition of Time Warner Cable? And is Comcast becoming too big?