Charter Communications and Comcast have both been seeking to acquire Times Warner Cable.  While Comcast eventually prevailed when it made a $45 billion offer for Times Warner, Charter will be able to pick up on some of the subscribers that Comcast is divesting.  Charter will also acquire a stake in a company Comcast is spinning out as well.

Charter will acquire 1.4 million subscribers that were served by Times Warner in Kentucky and a number of other states. Both Comcast and Charter would like to serve adjacent subscribers so there will likely continue to be trading of subscribers going on between the two companies.

Comcast plans on moving approximately 2.5 million of subscribers from the Midwest and South into a publicly traded company.  Charter would than gain a one-third control of this publicly traded company through payments of stock and cash.  Charter could at some time contain total control of this new company.

Changes are coming to the cable business due to online operations like Netflix.  However, the services cable companies provide still appear to be profitable.  Investors in Charter may also find hope in the deals with Comcast in that they will be at the table while the consolidation takes place.

For all of the planning, the above deal remains contingent upon Comcast acquiring Time Warner and also receiving approval of regulators.  Because of complexities in these matters, business attorneys are needed during all aspects of these transactions. The legal considerations for any merger or acquisition can sometimes seem endless.

Source: The New York Times, "Charter and Comcast to End Fight Over Time Warner Cable," David Gelles, April 27, 2014