Comcast is to acquire Time Warner for a sum of over $45 billion in stocks. The merger will see the country’s two largest cable companies become one, taking up three quarters of the US’s cable market.
The purchase was made in stocks, at $158.82 per share, which is pending approval and is expected to be complete by the end of the year. An official announcement is to be made on Thursday morning.
This combination of companies will set the two apart from every other communications competitor and seeing as Comcast already owns NBC Universal; the companies will own a massive share of the market.
The deal is likely to receive much criticism and scrutiny from regulators as Comcast and Time Warner will have a share of the market that may be too big and suppresses smaller competitors and content providers, especially the likes of Netflix.
While the deal is yet to be officially announced, it has already been condemned by media critics. “There’s no way this combination can conceivably be in the public interest,” wrote the LA Times; Michael Hiltzik. “The deal is a blunt challenge to the Federal Communications Commission and its new chairman, Tom Wheeler; the question is whether the FCC will fold against the economic and political power of these two behemoths.”
Comcast is alleged to be offering to drop three million of its subscribers in order to keep its cable marketplace ownership below 30 percent, a move that is likely being used to avoid too much scrutiny from authorities. The merger of the two companies will still see Comcast and Time Warner with a staggering 30 million subscribers.
The duo’s chief competitors are AT&T and Verizon. Both companies provide internet services and paid TV services with each having over five million subscribers, rather small figures when now compared to the combination of Comcast and Time Warner.