On Wednesday, Charter Communications, Inc. (NASDAQ:CHTR) completed the acquisition of Time Warner Cable Inc. (NYSE:TWC) at $55.1 billion, excluding debt, and the acquisition of Bright House Networks LLC at $10.4 billion.
After the deal, the combination of these three companies will serve more than 25 million consumers in 41 states. The company will gain 16 million Time Warner Cable subscribers in New York City, Dallas, and Los Angeles, and will also gain about 2.5 million customers of Bright House in Alabama, Indiana, and Florida. The new Charter became the second-largest cable operator, behind Comcast Corporation, and the third-largest pay TV provider.
“While Time Warner Cable and Bright House Networks customers will not see any immediate change, the company will be called Charter and the products and services will be marketed under the ‘Spectrum’ brand,” Alex Dudley, Charter’s spokesman, said in an e-mail.
The acquisition started about a year ago, and it was approved by the California Public Utilities Commission on Thursday after Federal Communications Commission sighed off the transaction last week. Actually, Charter was willing to buy Time Warner Cable and had negotiations with TWC in 2013 and early 2014. However, Time Warner Cable turned down Charter and found a white knight in Comcast Corporation (NASDAQ:CMCSA), but it ended with Comcast abandoning the deal.
Charter’s CEO, Tom Rutledge, will be the president, CEO and chairman of the new board, including 13 directors. Stockholders of Time Warner Cable will receive $100 cash and shares of the new company for each share of Time Warner Cable.
It’s not surprising that Charter bought Time Warner Cable. Time Warner Cable had low customer-service scores for years, according to the American Customer Satisfaction Index, Time Warner Cable’s pay-TV service scored 51 out of 100, compared with score of 63 of Charter’s pay-TV.