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Charter to buy Time Warner Cable for $56 billion

Charter to buy  Time Warner Cable for $56 billion

NEW YORK: Charter Communications Inc, the No. 3 cable TV operator, offered to buy No. 2 Time Warner Cable Inc for $56 billion on Tuesday but immediately ran into questions about whether regulators would agree to the combined company, which would control a big swath of the cable and Internet markets.

The union of the two companies would compete against cable market leader Comcast, confront the increased popularity of streaming services, and mark a huge step toward industry consolidation, long advocated by cable pioneer John Malone, Charter’s biggest shareholder.

The merger partners, which promised better access to broadband Internet for consumers, faster speeds and more public WiFi networks, nonetheless could face regulatory obstacles that helped sink Comcast Corp’s earlier bid for Time Warner Cable.

The Federal Communications Commission was unusually quick to comment, saying early Tuesday it would closely review the deal’s merits. The agency determines whether mergers are in the public interest.

“The Commission will look to see how American consumers would benefit if the deal were to be approved,” FCC Chairman Tom Wheeler said in a statement.

Charter, 26-per cent owned by Liberty Broadband Corp , offered about $195.71 in cash and stock for each Time Warner Cable share, based on Charter’s closing price on May 20.

Including debt, the deal values Time Warner Cable at $78.7bn, making it the sixth largest US deal on record, according to Thomson Reuters data.

A merger of Charter and Time Warner Cable along with other deals would create a company that controls more than 20pc of the US broadband market, according to research firm MoffettNathanson.

Published in Dawn, May 27th, 2015

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