February 19, 2014

Comcast announces plans to merge with Time Warner Cable

Telecom giant Comcast recently announced its intention to acquire Time Warner Cable. The deal is valued at $45 billion and would combine the two largest cable service providers in the United States. 

"The combination of Time Warner Cable and Comcast creates an exciting opportunity for our company, for our customers, and for our shareholders," said Brian Roberts, Comcast's Chairman and CEO, in a press release. "In addition to creating a world-class company, this is a compelling financial and strategic transaction for our shareholders."

This latest purchase is the second part of Comcast's acquisition strategy that media analysts say will change landscape of the industry. Last year the company finalized its purchase of NBC Universal from General Electric. The current merger will most likely also put an end to Charter Communication's attempt to purchase Time Warner Cable. 

The two cable companies do not directly compete in any markets, so it's unlikely that consumers will notice considerable change with their service. Despite this lack of competition, this deal is not without scrutiny. Consumer advocates argue that the creation of such a large cable and internet provider will drive up prices and shut out smaller companies. Currently 33 million American households have either Comcast or Time Warner Cable as their television service provider.

In order for the deal to be approved, federal regulators will determine if the merger will impact current and future consumers. They will also investigate whether the combined company will wield more power in negotiations with cable networks. Last year, Time Warner Cable was briefly shut out from Viacom networks, when the two company's could not agree on a price for access. 

Officials from Comcast and Time Warner say that they expect the merger to be completed by the end of the year.