Brian Roberts’ Comcast confirmed Thursday morning that his Philadelphia cable company is acquiring Time Warner Cable in an all-stock deal valued at $45.2 billion.
But a predictable army of critics came out to oppose the proposed deal, arguing that it is bad for consumers and rival companies, including smaller cable outfits.
Comcast is paying shareholders of New York-based TWC in stock valued at almost $160 per share.
Shares in Comcast, the country’s No. 1 cable company with 21.7 million subscribers, fell 3.8 percent in early afternoon trading on Thursday. TWC shares rose 7.7 percent to $144.77.
Charter Communications, controlled by John Malone, which had moved in recent weeks to acquire TWC for $132.50 a share but now seems to be the bridesmaid at the corporate wedding, fell back 6.0 percent to $129.39.
Among the critics of the acquisition are Silicon Valley-backed Public Knowledge, which favors free and open internet access, and the American Cable Association, which represents small cable operators who fear increased fees from NBCUniversal.
In a presentation Thursday, Comcast tried to head off critics, arguing that it doesn’t overlap with TWC in any zip code and that it is prepared to divest 3 million subscribers to stay under 30 percent of the pay-TV universe.
The news is the third major transaction in as many years for Comcast, which acquired a majority stake in General Electric’s NBCUniversal in 2010 and then acquired the balance in 2013 to consolidate its ownership.
Roberts, who will control a cable company with about 33.3 million subs after the deal closes, said: “We believe there are meaningful operational synergies and the adjusted purchase multiple is approximately 6.7 x operating cash flow.”
Comcast hopes to wring $1.5 billion in synergies as part of the deal.
TWC chairman and CEO Rob Marcus, who just took over the top spots in January, issued a statement saying: “This combination creates a company that delivers maximum value for our shareholders, enormous opportunities for our employees and a superior experience for our customers.”
Meanwhile, Charter, backed by Malone’s Liberty Media, issued a statement indicating that its play to consolidate the cable company would go beyond TWC.
“Charter has always maintained that our greatest opportunity to create value for our shareholders is by executing our current business plan and that we will continue to be disciplined in this and any other M&A activity we pursue.”
Both Cablevision and Cox are viewed as potential targets.