Charter Deal for Time Warner Cable Signals Shift in TV Industry

Trying to succeed where Comcast failed, Charter Communications has struck a deal to buy Time Warner Cable, an acquisition that would create a powerhouse in the consolidating American cable and broadband industry.

Charter plans to announce on May 26 a $55 billion deal for its larger rival and an approximately $10 billion takeover of a smaller competitor, Bright House Networks. With those deals, Charter will become a significantly stronger rival to Comcast, the giant of the cable industry, which had until last month sought to buy Time Warner Cable itself until the plan met resistance from federal antitrust regulators. Buying Time Warner Cable, as well as Bright House, will transform Charter — a small operator born in St. Louis in 1993 — into the most serious competitor to Comcast to date. The two acquisitions will approximately quadruple Charter’s customer base to about 24 million, compared with Comcast’s 27 million. Under the terms of its deal, Charter will pay about $195 per Time Warner Cable share in cash and stock. That is almost 14 percent higher than Time Warner Cable’s closing stock price on May 22 — and 47 percent higher than Charter’s original bid for its rival from early 2014. To help finance the deal, Charter will sell $5 billion worth of stock to Liberty Broadband, part of the telecom empire owned by the billionaire John C. Malone. Time Warner Cable operates in 29 states, from Maine to Hawaii.