Charter Communications to Acquire Time Warner Cable for $78 Billion

Stamford-based Charter Communications, Inc. and Time Warner Cable Inc. announced Tuesday that they have entered into an agreement for Charter to merge with Time Warner Cable.

The deal values Time Warner Cable at $78.7 billion, according to the announcement. The combination of Charter, Time Warner Cable and Bright House will create a broadband services and technology company serving 23.9 million customers in 41 states, according to the company.

And Charter and Advance/Newhouse Partnership (a parent of Bright House Networks, LLC) also announced that the two companies have amended the agreement which the two parties signed and announced on March 31, 2015, that allows Charter’s acquisition of Bright House Networks (“Bright House”) for $10.4 billion. That agreement, as amended, provides for Charter and Advance/Newhouse to form a new partnership of which New Charter will own between approximately 86% and 87% and of which Advance/Newhouse will own between approximately 13% and 14%.

Charter also announced today that Liberty Broadband Corporation (“Liberty Broadband”) has agreed to purchase, upon closing of the Time Warner Cable transaction, $4.3 billion of newly issued shares of New Charter at a price equivalent to $176.95 per Charter share, which represents Charter’s closing price as of May 20. As previously announced, Liberty Broadband will also purchase, upon closing of the Charter-Advance/Newhouse transaction, $700 million of newly issued Charter shares at a price equivalent to $173 per Charter share.

Charter President and CEO Tom Rutledge said in a statement, “With our larger reach, we will be able to accelerate the deployment of faster Internet speeds, state-of-the-art video experiences, and fully–featured voice products, at highly competitive prices. In addition, we will drive greater competition through further deployment of new competitive facilities-based WiFi networks in public places, and the expansion of the facilities footprint of optical networks to serve the large, small and medium sized business services marketplace.”

New Charter will be led by Rutledge, who will serve as President and CEO. Rutledge will be offered a new five-year employment agreement. At the close of the transactions, New Charter’s Board of Directors will consist of 13 directors including Rutledge, who will be offered the position of Chairman. The remaining 12 directors will include seven independent directors nominated by the independent directors serving on Charter’s Board of Directors, two directors designated by Advance/Newhouse, and three directors designated by Liberty Broadband. Charter’s current Chairman since 2009, Eric Zinterhofer, will continue to serve on New Charter’s Board.

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Photo credit: Charter Communications via Facebook.