Comcast downsizes in Charter deal

Comcast and Charter announced a divestiture plan that would take effect after the close of the Comcast-Time Warner Cable merger. Charter would acquire about 1.4 million of Time Warner Cable's current subscribers in a cash deal, boosting its customer base from 4.4 million to 5.7 million. Comcast and Charter will also swap about 1.6 million existing Time Warner Cable customers and 1.6 million Charter customers in a "tax-efficient like kind" exchange.

After a tax-free reorganization, the "new" Charter will also acquire about 33% of a new Comcast-created and publicly-traded spin-off company with about 2.5 million current Comcast customers. Overall, these transactions, contingent on the approval of the merger between Comcast and Time Warner Cable, the deals would result in Comcast divesting about 3.9 million customers. That would put Comcast's managed residential subscriber base below 30% of total cable TV subscribers in the U.S., the same market share the company had in past deals with Adelphia in 2006 and AT&T Broadband in 2002, Comcast says.