From DailyTech: Comcast Corp. (CMCSA) is expected to on Thursday officially announce a mind-blowing deal, which would mark the biggest consolidation in over a decade in the cable television and broadband internet market, if allowed. Comcast's bid will reportedly slot in at $159 USD per share of Time Warner Cable (TWC) stock, making the deal worth just over $45 billion.
Bloomberg, Reuters, and The New York Times are all reporting that the deal will be announced tomorrow. And most tellingly, NBC News -- whose parent company is owned by Comcast -- also is reporting the deal will become official on Thursday.
The deal would create a market behemoth, merging together the first and second place competitors in both the TV and broadband internet markets.
Comcast has roughly a 25 percent share of the broadband market; TWC controls around 12 percent of the market [source]. Comcast currently controls roughly 19 percent of subscription cable TV market; TWC controls around 9 percent of it. Together the pair would control roughly a third (37 percent of broadband; 28 percent of cable TV) of two vital U.S. communications markets.
On a local scale the deal would be a massive win for Comcast and a massive loss for consumers, who would see scarce competition (Time Warner Cable vs. Comcast) reduced to none.
In all likelihood the deal will face lawsuits from the U.S. Federal Communications Commission (FCC) and the U.S. Department of Justice (DOJ) on antitrust grounds. The Motley Fool writer Anders Byland wrote about this possibility back in November 2013, when the bid was just a rumor. He titled his piece "The Time Warner and Comcast Merger Can't Happen. Here's Why."
In it he writes:
I would advise you not to hold your breath awaiting this business combination. Here's why.
Having Time Warner join forces with Comcast would create a massive cable operator. I mean an industry giant of epic proportions. Comcast serves nearly 22 million video subscribers, and Time Warner is No. 2 in the cable TV industry, with more than $11 million customers. The third-largest cable service provider is Cox Communications, with just 5.4 million households to its name.
You see the problem, right? In a total TV service market of 116 million households, including satellite subscribers and rabbit-ear antennae, Comcast wants to grow its market share from 19% to 28% in one fell swoop.
I don't think our regulatory bodies are going to like that idea.
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