Cable: Charter bought Time Warner for $ 55 billion

The US cable operator Charter Communications announced Tuesday the acquisition of US rival Time Warner Cable (TWC), the blowing and the French Altice comes foothold in the United States in full consolidation of the sector.

After unsuccessful attempts in 2013, the US number four cable has decided to cut short Tuesday on speculation by putting the $ 55.3 billion merger with TWC table and create a cable titan in the United States. The deal amounted to a total of $ 78.7 billion including debt.

The French billionaire Patrick Drahi, who is the head of a media empire and telecommunications in France including Numericable-SFR or newspapers L’Express and Liberation, will not make against-offers, told AFP a source close to the matter. Solicited, Altice has declined to comment.

The long-awaited battle between French businessman and his mentor, the American billionaire John Malone (Liberty Media, Charter) will finally take place.

Patrick Drahi, who met last week TWC CEO Robert Marcus in New York to discuss a possible merger between the two groups, according to sources close to the ultimately made no offer. However, banks were shaken to bring the necessary funding, according to banking sources and close the file.

The Netflix threat

The French billionaire, who took control last week of Suddenlink, the seventh US operator, is expected to strengthen in the US through new acquisitions in the coming months. As in Europe, it examines other tracks because he wants to remain at the center of major maneuvers in the area, sources said.

Putting his hand on TWC, Charter, which will also buy in stride the sixth US cable operator Bright House, gave birth to a group with nearly 24 million subscribers, against 27 million in the number of Comcast sector.

“We will be able to accelerate the deployment of very high speed” and to propose the most advanced in video technology, all at “competitive prices,” said Tom Rutledge, CEO of Charter, who will lead the new entity .

This is an important step in the consolidation of a highly fragmented industry with a multitude of local actors but is upset by the new habits of US consumers and the rise of content providers like Netflix, Hulu or Amazon, which offer the video online (streaming). These changes require distributors to offer attractive catalogs provided and not to lose footing.

Only problem: this adaptation involves higher costs, analysts said, especially as cable operators are pressed for sports channels that are trying to pass them soaring sports rights. Also they hope magnifying increase their weight in trade negotiations with content providers, analysts said.

The recomposition of the sector is closely scrutinized by competition authorities because cable operators with telecom operators are one of the primary means of Internet access in the United States.

There is a month the reluctance of US regulators were right merger plans between Comcast and TWC.

But analysts are less pessimistic in terms of the reconciliation Charter Time Warner Cable.

“We do not expect any huge obstacles as those which faced Comcast,” said Kannan Venkateshwar at Barclays Bank, noting that the area covered by Charter-TWC is narrower than that of Comcast-TWC, which, Between them, would control 30% of pay TV in the US.

“But given the political uproar had raised the Comcast transaction, we believe that it (Charter-TWC) will also receive a thorough examination even if it is smaller,” he argued.

“The Commission will look at what would be the benefits to American consumers if the operation was approved,” said Tom Wheeler, chairman of the FCC, the telecoms regulator, in a statement. In case of veto, Charter will provide $ 2 billion to Time Warner Cable.

Share
The Stopru