Charter to buy Bright House for $10.4B

Charter Communications (NASDAQ: CHTR) announced it plans to purchase Bright House Networks for $10.4 billion. The deal, which had been rumored in reports earlier this month, would combine the nation's sixth and fourth largest cable operators into a company that Charter said would be the second-largest cable operator in the United States.

Importantly, the agreement also signals a belief among Charter and Bright House executives that Comcast's $45 billion proposed purchase of Time Warner Cable (NYSE: TWC) will be approved by U.S. regulators. The merger between Comcast (NASDAQ: CMCSA) and TWC would create the nation's largest cable operator.

A combined Charter and Bright House would serve 26.4 million passings and 10.1 million owned and serviced video customers. In announcing the transaction, Charter said Bright House serves around 2 million video customers in central Florida including Orlando and the Tampa Bay area, as well as Alabama, Indiana, Michigan, and California. The addition of those customers would improve Charter's scale.

"Bright House Networks provides Charter with important operating, financial and tax benefits, as well as strategic flexibility," Charter's president and CEO, Tom Rutledge, said in a release. "Bright House has built outstanding cable systems in attractive markets that are either complete, or contiguous with the New Charter footprint. This acquisition enhances our scale, and solidifies New Charter as the second largest cable operator in the U.S."

The proposed merger between Charter and Bright House will include a number of complex financial arraignments whereby the combined company will be a partnership between Charter and Advance/Newhouse that Charter will own 73.7 percent of. Further, Liberty Broadband will purchase $700 million in shares of the new company after the deal closes, giving it equity ownership of around 19.4 percent.

Charter said integrating Bright House within Charter structure will result in "the elimination of Time Warner Cable management fee more than offset programming dis-synergies."

Charter was outbid by Comcast in its quest last year to acquire Time Warner Cable. Charter now has a third-party role in the massive, $45 billion Comcast-TWC transaction and is waiting for regulatory approval to, among other things, launch a joint venture with Comcast called Greatland Connections.

The merger between Charter and Bright House is the latest major consolidation in the cable industry, which is being buffeted by competition from online video providers and others.

For more:
- see this release
- see this WSJ article

Related Articles:
Charter in talks to buy Bright House, report says
Charter CFO Winfrey: We want to bundle programming by genre
Charter more ready than ever to go after TWC if Comcast can't close deal, Liberty's Maffei says
Charter, Dish executives among new pay-TV industry stars to watch in 2015

Suggested Articles

The service, which is owned by Viacom, said it launched today on X1. It was already available on Xfinity Flex, a streaming video platform service Comcast…

The U.S. streaming video market is on the cusp of big expansion – with players like Apple, Disney and WarnerMedia joining the fray – and it’s going to fuel…

AT&T is planning to officially launch its new streaming version of the full DirecTV product in the third quarter of 2019 and John Donovan, CEO of AT&T…