Feb. 13 - A $45 billion marriage between Comcast and Time Warner Cable, the two largest U.S. cable operators, will likely be scrutinized by regulators, but analysts think the deal will get their blessing. Fred Katayama reports.
A stunning twist: Time Warner Cable says it'll elope with Comcast in a friendly $45 billion deal, leaving long-time suitor Charter Communications at the altar. Comcast's dowry of $159 a share is just shy of the $160 Time Warner had demanded, and Charter's hostile bid was way below that. The deal could give Comcast more leverage in negotiating carriage deals with programmers. The combination of the two largest cable operators gives Comcast a total of 30 million subscribers after it divests 3 million subs to satisfy regulators. Justice and FCC officials will likely scrutinize this deal even though a divestiture will bring the total to just under the 30 percent share threshold that used to be the FCC's ownership cap. The two companies don't overlap in major markets. Stifel analyst Christopher King thinks regulators will bless the deal. He said: "We believe the government will probably have concerns about the ability of Comcast-Time Warner Cable to bully competitors and suppliers…but we're skeptical Department of Justice will want to make this an antitrust test case for vertical integration." Time Warner shares soared on the news, while Charter fell sharply and Comcast eased. This show may not be over yet. Cable cowboy and Charter-backer John Malone has two options: buy the subscribers Comcast seeks to sell or shoot back with another bid.