Altice will become a major force in the lucrative U.S. cable market after it agreed to buy America's fourth-largest operator Cablevision for a mix of cash and shares in a deal worth $17.7 billion including debt. As Sonia Legg reports, it's the latest in a series of buy-ups by the European telecoms group.
You could almost call him a shopaholic. Just four months after one big U.S. purchase Patrick Drahi is making another - and this time he's really splashing out. The Franco-Israeli billionaire runs the European Telecoms group Altice. After buying the U.S. regional cable group Suddenlink for $9 billion it's now agreed to buy Cablevision - America's fourth-largest operator. Brenda Kelly is from London capital Group (SOUNDBITE) (English) HEAD ANALYST, LONDON CAPITAL GROUP, BRENDA KELLY, SAYING: "It's a 15.7 billion euro deal and if it accelerates its expansion there then you are obviously creating a greater amount of exposure and you're looking for extra growth as well." The two companies had been in talks since June. But convincing Cablevision's head Charles Dolan - to part with the family firm after many years - wasn't easy. Altice will pay $34.90 a share - that's a 22 percent premium on Wednesday's closing price. It's thought $3 billion will come from a share sale with $7 billion in debt. (SOUNDBITE) (English) HEAD ANALYST, LONDON CAPITAL GROUP, BRENDA KELLY, SAYING: "It does seem expensive but I do feel it will payoff in the end, it may take a number of years." Cablevision has 3.1 million customers. And Drahi is expected to apply his cost-cutting zeal to generate $900 million in synergies there every year. But his firm isn't the only one in the sector looking to consolidate as viewing habits change. Video streaming services like Netflix lead U.S. cable and satellite groups to suffer their largest subscriber losses ever in the second quarter. Shares in Altice initially rose 13 percent after the deal was announced. It's been Europe's best-performing telecom stock this year, up more than 50 percent prior to this deal.