In a world where many people want high broadband speeds, demand high quality video and are constantly craving new internet and video technologies, a merger between two well-known cable providers may be exciting news for consumers. However, our Louisiana residents may find it interesting to learn such mergers are not always easy, and require regulatory approval before the actual merger becomes a reality.
Recently, two of the largest U.S. cable companies, namely Time Warner Cable and Comcast, announced an all stock merger deal. Under the deal, Comcast is expected to get nearly all of Time Warner Cable’s 285 million shares. On the other hand, Time Warner will get Comcast stock, which is worth a little over $45 billion. If approved, this merger will likely create a massive pay-television entity for millions who subscribe to their services, and expected to create about 1.5 billion in savings.
Even though, in favor of the merge, both companies are highlighting their combined technological ability, and potential savings they will bring to the market. Nonetheless, consumer watchdog groups are opposing the deal. The consumer watchdog groups allege that the merger will increase the cost of services the cable companies provide to consumers’, and hamper their competitors’ progress and innovation.
Those opposed to this merger also note that, currently, the cable market is already very competitive, has very high prices, which keep increasing and, thus, this merger would be bad for the consumer. Furthermore, they note that placing most of the country’s communications under one provider is a very risky and potentially dangerous proposition.
Given that the merger involves two of the largest cable companies in the nation, regulators are likely to closely examine every facet of the deal. Regulatory approval can get complex. Thus, during such merger negotiations and talks, it is essential for the companies to seek the legal knowledge of a business law firm that is familiar with such transactions, and the regulatory approval process.
Source: CNET, “Comcast, Time Warner Cable to unite in $45.2B merger,” Joan Solsman, Feb. 13, 2014