Comcast’s February announcement of a planned $45.2 billion acquisition of Time Warner Cable came with the promise to divest itself of 3 million subscribers, a move to appease regulators who might be wary of the country’s two biggest cable companies joining forces.The details weren’t revealed at the time, but today Comcast said that 1.4 million TWC subscribers will be transferred to Charter in exchange for $7.3 billion cash if the merger is approved. Additionally, Comcast will spin out a new “publicly traded company that will operate systems serving approximately 2.5 million existing Comcast customers.”
That adds up to a net reduction of 3.9 million video customers from the merged Comcast/Time Warner Cable entity. Comcast had 21.7 million video subscribers at the end of 2013, while Time Warner had 11.4 million. Charter is the fourth biggest cable company (after Cox) with 4.3 million customers. Charter could become the second biggest, with Cox remaining at third, after the Comcast/TWC merger and divestitures.
After divestitures, the combined Comcast and Time Warner Cable would control a bit less than 30 percent of the country’s multi-channel video programming market. The Federal Communications Commission formerly issued a rule limiting any one cable provider to no more than 30 percent of the overall video market. That rule was thrown out in court, but Comcast is still trying to stay under 30 percent to make regulatory approval more likely.
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