Boston, MA 05\/08\/2014 (wallstreetpr) \u2013 Comcast Corporation (NASDAQ:CMCSA)<\/b> agreed to divest its subscribers by virtue of the merger with Time Warner Cable. The realignment intends to increase the operational efficiency and geographic footprint.<\/p>\n
Three ways agreement<\/b><\/p>\n
The agreement include three transactions –<\/p>\n
Comcast will divest systems business to Charter for an estimated amount of $7.3 billion of cash. It represents ~1.4 million existing customers of Time Warner Cable.<\/p>\n
Secondly, Charter and Comcast will transfer assets through a tax-free exchange. It involves ~1.6 million of Charter customers and ~1.6 million TWC\u2019s subscribers.<\/p>\n
Finally, Comcast will spin off its cable systems business as a new company (SpinCo)<\/b> to serve ~2.5 million existing Comcast customers that represents ~67% ownership in SpinCo. Then, Charter will acquire 33% of SpinCo in exchange with 13% of the equity (~2.1 billion) of new holding company to SpinCo shareholders.<\/p>\n
Advantage over the transaction<\/b><\/p>\n
The transaction will help the companies to manage their operations efficiently while providing high valued services to their customers. Charter will now own ~5.7 million video customers and will manage additional ~2.5 million SpinCo customers. As a result, Charter will increase its customer base to ~8.2 million that will create growth opportunities for Company and will make Charter as the second largest cable operator in the U.S.<\/p>\n
On the other end, the transaction will reduce Comcast Corporation (NASDAQ:CMCSA)\u2019s managed customers by 30% of total subscribers in the U.S., however, Comcast expects an operational gain of ~$1.5 billion from the merger with TWC. In addition, Comcast will benefit from asset sales with net cash proceeds of ~5 billion that will help to manage leverage while reducing its debt by ~$9 billion and expand its share repurchase capacity.<\/p>\n
The transaction will provide revenue growth for Comcast Corporation (NASDAQ:CMCSA) while increasing the advertising opportunities to serve regional and enterprise businesses. It also sustainably improves the operational efficiency and increase the value for its shareholders.<\/p>\n","protected":false},"excerpt":{"rendered":"
Boston, MA 05\/08\/2014 (wallstreetpr) \u2013 Comcast Corporation (NASDAQ:CMCSA) agreed to divest its subscribers by virtue of the merger with Time Warner Cable. The realignment intends […]<\/p>\n","protected":false},"author":32,"featured_media":15681,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rop_custom_images_group":[],"rop_custom_messages_group":[],"rop_publish_now":"initial","rop_publish_now_accounts":{"twitter_2902945987_2902945987":""},"rop_publish_now_history":[],"rop_publish_now_status":"pending","footnotes":""},"categories":[2236],"tags":[1666,910,6447],"stock_ticker":[],"class_list":["post-21585","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-comcast-corporation-nasdaqcmcsa","tag-nasdaqcmcsa","tag-spinco","entry"],"acf":[],"yoast_head":"\n