Charter Strikes $56B Deal For Time Warner Cable

mpicpp writes with word that Charter Communications has struck a $56 billion deal to buy Time Warner Cable; if the deal goes through (which the article says is likely, according to Macquarie Research analyst Amy Yong -- at least more likely than the recently scotched Comcast-Time Warner deal), it would mean that the second- and third-largest U.S. cable companies would share a letterhead, and more than 20 percent of the country's ISP market. From the linked Reuters article: The Federal Communications Commission immediately served notice that it would closely scrutinize the deal, focusing not only on absence of harm but benefits to the public. Charter, in which Malone-chaired Liberty Broadband Corp owns about 26 percent, is offering 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 $78.7 billion. A key area of regulatory concern would be competition in broadband Internet.

Comments

Again?

[gstoddart]

Surely Time Warner has learned the lesson of not being bought for funny money stock?

Because when AOL bought them with trumped up stock, somehow AOL was worth more than an entity with cable, programming,network infrastructure, move studios.

Somehow I wonder if Time Warner isn't selling the farm for a couple of magic beans (again).

And you can bet your ass this single entity will not do anything to lower prices or foster competition ... it will be more "we're screwing you because we can".

The only people this will be good for are executives who get huge severance packages. But I'm betting in the long run it hurts consumers, and quite possibly shareholders.

Re:Again?

[pr0t0]

Creating a business is all about mergers and acquisitions. You build a customer base and become attractive enough to one of the larger players to be gobbled up. The C-level execs all get golden parachutes, the mid-management get completely axed, and the peons see a reduction of 60% and a pay cut; which pays for the parachutes.

In the end, the consumer gets necessarily screwed as there is either a reduction in competition, or a preclusion of competition; unless you own stock in the company being purchased.

This has been the predominate business methodology in the U.S. since the mid-80's (admittedly, conjecture on my part), and requires a major shift in thinking to stop this nonsense. But truly, mergers and acquisitions should be the exception not the rule, if fair-market competition is to be nurtured.

Re:I think they mean....

[jellomizer]

My view is they should split up the infrastructure and the content providers.

Perhaps the municipal governments having control of the infrastructure, and we can have a choice of ISPs and other content providers.

Re:Former Charter employee here

[bobbied]

IF they are lying about you to prospective employers and you can prove it, hire a lawyer and sue. I'm serious, don't mess around with these types, MAKE THEM STOP. If the company is worth anything, you will find it easy to get a lawyer to take the case on commission and I suggest you do, even if you have to give the lawyer 100%.

I had a former employer do this to me too. I had them on tape saying untrue things about my job performance to someone they believed was a prospective employer, so I threatened to claim damages, lost wages and the like. Now, they will only say that I'm ineligible to be rehired by them and confirm the dates I worked for them. I know, because I've checked.

Your reputation is most important here... Don't let them mess it up for you.

Re:Cost of even purposing

[Chas]

I wonder what the legal cost of even attempting this merger is above and beyond the cost of acquiring assets/debt. Though I guess it's not nearly as much as a they gain by grabbing the huge monopoly if it goes though.

Doesn't matter. The consumer ends up paying for it in the end.

I honestly wish these mega-mergers in cable would just be stopped. Flat out.

And before someone starts quoting combined numbers of Comcast+TWC vs Charter+TWC, understand this. The final number of subscribers is largely irrelevant due to geographic monopoly.

We have enough of these mega-monopoly ISPs as it is. And all the mergers do is concentrate the money so they can afford bigger and bigger bribes to buy a permissive atmosphere in which the best interests of consumers/constituencies are not looked after.

And the only recourse? Try to vote out these money-grubbing incumbents with their newly marble-lined solid platinum warchests...