Good Tuesday, everyone. Here's some news you're sure to love, if cable companies consolidating is your thing.
Charter Communications has agreed to acquire Bright House Networks for $10.4 billion. This means the US' fourth-largest cable provider is buying the sixth-largest. According to a release, Bright House serves about two million video customers in central Florida, as well as in Alabama, Indiana, Michigan, and California. Charter is in nearly 30 states, serving nearly six million.
There are a few hoops the companies must jump through before this deal goes final, however ...
The business will be conducted through a partnership (the "Partnership") of which Charter will own 73.7%, and of which Advance/Newhouse will own 26.3%. The consideration to be paid to Advance/Newhouse by New Charter will include common and convertible preferred units in the Partnership, in addition to $2 billion in cash. The partnership units owned by Advance/Newhouse will be exchangeable for common shares of New Charter. The deal is subject to several conditions, including Charter shareholder approval, the expiration of Time Warner Cable's right of first offer for Bright House, the close of Charter's previously-announced transactions with Comcast and regulatory approval.
But it's fair to assume that the regulatory approval process will not be a stringent as the one facing Comcast and Time Warner Cable right now.
"Bright House Networks provides Charter with important operating, financial and tax benefits, as well as strategic flexibility. Bright House has built outstanding cable systems in attractive markets that are either complete, or contiguous with the New Charter footprint. This acquisition enhances our scale, and solidifies New Charter as the second largest cable operator in the US. I look forward to working with the Bright House team, whom we have known for years, in delivering great products and services to grow our market share," said Charter CEO Tom Rutledge.
And with that, the cable industry grows tighter. Lovely.
Image via Jonathunder, Wikimedia Commons