$55B takeover bid for Time Warner Cable

Charter Communications, the fourth largest cable provider in the US, has announced it is buying Time Warner Cable, the country’s second largest cable company, in a deal worth $US55.33 billion ($A70.74 billion).

The move will create a new giant in the cable industry and a close rival to Comcast and the owner of NBCUniversal. The combined companies would have 24m customers compared to Comcast’s 27m.

It is the second bid for Time Warner by Charter Communications.

But the Federal Communications Commission (FCC) immediately announced it would look at the proposed transaction, and the deal faces some of the same problems that torpedoed a proposed merger between Time Warner and Comcast last month.

If successful the merger will be a crowning achievement for John Malone, the 74-year-old billionaire who is Charter’s main backer.

In July 2014, Rupert Murdoch’s 21st Century Fox made an unsolicited bid of $80bn to take over Time Warner. Murdoch said his company withdrew the bid in August after Time Warner “refused to engage with us”.

The transaction is expected to be completed by the end of 2015, provided it gets regulatory approval.

Source: The Guardian, Bloomberg