Comcast Corporation (NASDAQ:CMCSA) has faced stiff oppositions from its antitrust regulators on the mega-merger deal on the cards with media technology rival Time Warner Cable Inc (NYSE:TWC). Both the companies haven’t been available to comment on the purported abandonment of the deal. The formal announcement of the abandoned $45 billion deal can come up anytime this week in the US.
Will A Powerful Conglomerate Be Beneficial For The Industry?
The purported merger, if agreed upon, would have led to the dominance of CMCSA as a television and broadband provider across the US. The purchase happened to include CMCSA swapping 2.875 shares in the stock market, for notching up every TWC share. Regulators and consumer groups had objected the premises of the merger, like two giants, in unison, would form a humongous, powerful single conglomerate.
With a widespread expanse across the US broadband market, the conglomerate, singularly would be controlling 60 percent of the net market share; which is anticompetitive. Netflix, Inc. (NASDAQ:NFLX) raised its objection on this premise. The company officials added that in all probabilities, the conglomerate would be charging unprecedented fees, which consumers would find tough to pay. The deal looked anti-competitive in all respective for video-streaming solutions.
Is The Merger Likely To Happen?
The two entities chose to discuss the possible merger because they operated on different territories, with minimal overlap in the way their respective businesses are coordinated. Once allowed, the combined conglomerate shall have a whopping 30 million customers throughout the US.
Comcast owns NBCUniversal that comprises NBC TV networks and other channels. If the deal goes well, the competitors shall be in a fix, as CMCSA would eventually dominate the television industry. The staff at Federal Communications Commission previously had sought for this merger-hearing.
Last month, CFO of Comcast, Michael Angelakis offered resignation to start off with a start-up as an entrepreneurial venture. Comcast pondered that acquiring TWC would be beneficial in nurturing better business opportunities. Now, how things materialize, can only be perceived on the official declaration by CMCSA.
