According to media reports, Comcast Corporation (CMCSA) has reached an agreement to acquire its closest cable rival Time Warner Cable (TWC) for $45.2 billion, or $159 a share, in a deal that would combine the nation’s top two cable TV companies.
The proposed blockbuster merger, which is expected to be announced Thursday morning, would create an entity with more than 33 million subscribers and operations in some of the country’s biggest markets, including New York City, LA, Chicago, Texas, Philadelphia (Comcast’s headquarters) and Washington, D.C.
“Time Warner Cable having New York and LA—several million subscribers in the two most important cities in the country—this is an unparalleled, unique asset that is never going to come available for sale again,” Richard Greenfield, media and technology analyst at BTIG told CNBC.
The boards of both companies have approved the merger, which pending regulatory approval is expected to close by the end of the year.
In the deal, Time Warner shareholders will receive $158.82 a share in stock for their shares, a 17% premium over the stock’s Wednesday closing price of $135.31.Comcast has offered 2.875 of newly issued shares of its stock for each share of TWC in the all-stock transaction.
With the proposed deal, Comcast, which completed its acquisition of NBC Universal from General Electric (GE) less than a year ago, ends an eight month takeover battle for TWC waged by cable operator Charter Communications Inc. (CHTR) and its biggest shareholder, Liberty Media Corp. (LMCA).
The price offered by Comcast trumps a proposal by Charter Communications to buy Time Warner for about $38 billion in cash and stock worth $132.50 per share. CEO Rob Marcus rejected the bid, calling it “grossly inadequate” and countered with a suggestion of $160 or more per each TWC share.
Comcast’s offer for Time Warner Cable is $26 a share above Charter’s bid.