Comcast kills $45.2B Time Warner Cable takeover

As expected, Comcast (NASDAQ: CMCSA) has announced that it's ending its $45.2 billion quest to buy Time Warner Cable (NYSE: TWC).

The official announcement, coming after both the U.S. Department of Justice and Federal Communications Commission moved to block the deal, also said the three-way agreement with Charter Communications (NASDAQ: CHTR) that would have resulted in new cable company, GreatLand Communications, is off.

"Today, we move on," said Comcast Chairman and CEO Brian Roberts, in a statement. "Of course, we would have liked to bring our great products to new cities, but we structured this deal so that if the government didn't agree, we could walk away.

"Comcast NBCUniversal is a unique company with strong momentum. Throughout this entire process, our employees have kept their eye on the ball and we have had fantastic operating results. I want to thank them and the employees of Time Warner Cable for their tireless efforts.

"I couldn't be more proud of this company and I am truly excited for what's next."

Added TWC CEO Robert Marcus: "We have always believed that Time Warner Cable is a one-of-a-kind asset," he said. "We are strong and getting stronger."

For his part, Marcus missed out on a payout of around $80 million, which would have occured had the deal gone through. 

The termination announcement comes a full 14 months after Comcast originally announced one of the biggest, most controversial media infrastructure deals in history. The federal review was slow, arduous, and full of starts and stops, with the FCC pausing on numerous occasions over disclosure disputes involving programmers.

As the federal review process wore on, the deal became increasingly unpopular among interest groups, rival companies, politicians, and finally the two governing bodies in charge of signing off on the agreement.

As Comcast and TWC executives met officials met face-to-face with members of the Justice Department earlier this week, DOJ officials were said to be in no mood to grant Comcast the "behavioral remedies" that sufficed during its successful purchase of NBCUniversal three years ago.

Similarly, FCC officials on Wednesday ordered that the decision on the merger be made by an administrative law judge. It was a similar decision in 2011 that caused AT&T (NYSE: T) to abandon its bid to acquire T-Mobile (NYSE:TMUS).

Immediately after Comcast made the deal's end official, the myriad groups opposing the merger weighed in thoughts, musings, and grave dancings.

This included the Stop Mega Comcast Coalition, a group made up largely of Comcast competitors, releasing the following statement: "Today's news that Comcast has ended its effort to create Mega Comcast through the acquisition of Time Warner Cable is a tremendous victory for consumers, competition and innovation. This outcome is the direct result of the efforts of hundreds of thousands of citizens, Members of Congress, community leaders nationwide, as well as dozens of businesses and organizations who have advocated tirelessly in defense of a competitive media marketplace. The FCC and DOJ are to be commended for conducting a fair, fact-based review process that has upheld the law and served the interests of the public." 

As for Wall Street, it sees plenty of options for both Comcast and TWC--stock prices for both companies were fairly stable, up around 1 percent, an hour after the announcement.

Analysts expect that Comcast will now look to acquire another asset, such as a large SVOD service or a huge programming conglomerate like Time Warner Inc.

TWC, meanwhile, will come back under the eye of Charter Communications (NASDAQ: CHTR), which had been circling the MSO prior to Comcast's February 2014 bid.

"We believe that TWC will get a bid from Charter in the next three months, which we expect to be lower than the market expects," Needham and Company analyst Laura Martin told investors Friday morning. 

For more:
- read this Comcast press release

Related links:
Report: Comcast set to walk away from TWC deal
Comcast-TWC deal decision ominously sent to administrative judge by FCC
Report: Comcast agreed to make Hulu 'nationwide streaming video platform of the cable industry'
Merger opponent Franken expresses 'new hope' as Comcast, TWC prepare for pivotal DOJ meeting
Comcast, TWC set to meet with DOJ following reports of merger blockage
Collapse of Comcast-TWC merger to have wide-reaching domino effect, analyst says
Comcast, TWC execs set to meet with DOJ to save merger; conditions will be 'substantial,' analyst says

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