Charter Communications is set to buy Time Warner Cable (TWC) for nearly $55 billion.
Earlier, Comcast decided to pull out of a $45 billion merger deal with Time Warner Cable due to opposition from regulator FCC.
Charter Communications is snapping up the cable provider after getting last-minute competition from French billionaire Patrick Drahi-owned Altice SA.
Charter will pay $195.71 a share — 14 percent above Time Warner Cable’s May 22 close — with $100 in cash and the remainder in its own stock.
As announced earlier, Charter will acquire Bright House Networks, a smaller cable company, for $10.4 billion. Bright House will also be merged into the combined entity.
Tom Rutledge will serve as president and CEO of New Charter.
Charter Communications did not share any specific details on synergies or savings after buying TWC.
Meanwhile, Fitch said the combined company will serve 24 million customer relationships and become the second largest cable multiple system operator. Revenues were nearly $36 billion in 2014 and EBITDA was nearly $13 billion.
The combination of Charter, Time Warner Cable and Bright House will create a broadband services and technology company serving 23.9 million customers in 41 states.
Tom Rutledge, president and CEO of Charter Communications, said: “With our larger reach, we will be able to accelerate the deployment of faster Internet speeds, better video experiences, and fully–featured voice products, at highly competitive prices.”
Charter is the fourth-biggest U.S. cable company, while TWC is the No. 2.
The American cable market is seeing several M&A actions. AT&T is paying $48.5 billion for satellite-TV provider DirecTV and is waiting for the FCC approval.
The Time Warner Cable deal enables Charter, whose largest shareholder is billionaire John Malone, to almost quadruple its number of cable subscribers, gaining 12 million customers in cities including New York, Los Angeles and Dallas, said a Bloomberg report.
FCC Chairman Tom Wheeler called Time Warner Cable’s Marcus and Charter CEO Tom Rutledge recently to dispel notions that industry mergers won’t be approved by regulators. Wheeler told the CEOs that any transaction would be judged on merit, and there was no flat ban on cable combinations.