Boston, MA 02/20/2014 (wallstreetpr) – Comcast Corporation (NASDAQ:CMCSA) has raised a total of $2.2 billion with its bond sale after agreeing the acquisition of Time Warner for $45.2 billion. Comcast had issue $1.2 billion of 3.6% in 10 year notes expected to yield 93 basis points and $1 billion of 4.75%. The proceeds from the bond are expected to boost the company’s working capital while also helping in offsetting the company’s debt
Comcast had recently shrugged competition from Charter Communications Inc. which had tabled a bid of $132.50 a share to buy Time Warner Cable, on its part it decided to go to the extreme end and tabled a bid of $158.82 a share which was eventually accepted. The deal is in its final stages only awaiting approval from stockholders and regulators.
Effects of Comcast acquisition
The merger of Comcast and Time Warner brings lots of challenges to independent programmers like AMC which are sure to face increased competition. This may prompt these small programmers to seek partners in a bid of strengthening their positions in the ever competitive Pay TV industry. The main reason behind the recent mergers has been the increasing programming costs that have affected the industry.
The new acquisition will essentially put Comcast on the throne as the biggest pay TV provider in the industry commanding a total of 30 million subscribers, this is a huge margin compared to No 2 DirecTV subscribers of 20 million. Comcast and Time Warner in their joint operation expect to save up to $1.5 billion in operational costs annually.
Comcast merger with TWC provides a viable opportunity of realizing efficiencies in operations and capital spending with minimal execution risks. The merger will also assist Comcast in spreading its operational strategies as well as technology roadmap into Time Warner operations.
Comcast Corporation (NASDAQ:CMCSA) slipped on Wednesday trading session by 3.66% to close the day at $51.57 a share.
