Comcast to acquire Time Warner Cable

Comcast, the largest U.S. cable company, confirmed plans on Thursday to acquire Time Warner Cable, its primary competitor, for $158.82 per share in an all-stock deal worth $45.2 billion. The deal would create a dominant force in both the creation and delivery of television entertainment to U.S. homes, and expand Comcast’s reach to a total of 30 million customers.

The friendly takeover came as a surprise after months of public pursuit of Time Warner Cable by smaller rival Charter Communications, and immediately raised questions as to whether the deal hindered competition and would pass the scrutiny of antitrust regulators.

However, Ali Velshi, host of Al Jazeera's "Real Money," said "there is no overlap between the two companies, so there is no competition lost.”

"None of the 30 million subscribers to either company ever had a choice between them," he added. "It's a knee-jerk argument that doesn't have a lot of meat on its bones."

While Comcast serves 40 states and Time Warner Cable serves 29, the companies do not directly compete in the same markets.

Comcast is interested in advertising advantages it would gain by owning the New York City market, which is currently dominated by Time Warner, as well as the opportunity to expand its business services unit, its fastest-growing cable division, to a larger market.

The deal would also give Comcast inroads in Los Angeles, where Time Warner owns two regional sports networks and has spent billions on local TV rights for Lakers basketball and Dodgers baseball.

"For Comcast, adding New York and Los Angeles has advertising potential, along with Time Warner Cable's sports assets, which provides an acquisition target that is simply too compelling to ignore, especially with (an underleveraged) balance sheet," said analyst Rich Greenfield of BTIG, a global finance firm. 

Still, the acquisition could create an environment where "channels may find negotiations with this new juggernaut more difficult, and that may result in higher prices or less choice for consumers," Velshi said.

Unionized workers employed by the companies might also see a raw deal, one member of the Communications Workers of America (CWA) union told Al Jazeera.

"This won’t trickle down to us at all," Rich said, declining to give his last name. 

"Technicians make money from repairing and improving the network, so when there’s no competition there’s no incentive for these companies to improve the network or maintain it."

Consumers might also take a hit, the CWA member said.

"These two merging decrease competition even to the smaller carriers because basically Comcast and Time Warner are going to set the price," Rich said.

The new company will have much more power in negotiating deals with broadcasters.

Cable companies pay fees to channels for the right to retransmit their programming. Recent disagreements over retransmission fees have taken some channels off the air, including CBS last year. 

"You double the size of that company, they’re really going to have a bigger stick to use," Rich added. 

According to the terms of the buyout, current shareholders of Time Warner Cable would receive 23 percent of merged company stock.

The deal is subject to approval from the Department of Justice and the Federal Communications Commission. The two companies expect to sign final agreements by year’s end.

The deal will be the second time in a little over a year that Comcast has helped reshape the U.S. media landscape, after its $17 billion acquisition of NBC Universal was completed in 2013.

Al Jazeera and wire services. Wilson Dizard contributed to this report.