The Merger Between Comcast and TWC

A) According to the article:’ Time Warner Cable to Merge with Comcast Corporation to Create a World-Class Technology and Media Company”, Time Warner Cable and Comcast came to a friendly agreement in which the board of directors approved the stock-for-stock transaction where Comcast will acquire 100% of Time Warner’s cable shares outstanding. This acquisition will be both beneficial for Comcast’s consumers and their shareholders where this merger will create a technological innovating company with ground breaking products and services. This acquisition will be accretive to Comcast’s free cash flow and yield many synergies for both companies. As Robert D. Marcus, Chairman and CEO of Time Warner Cable said, "This combination creates a company that delivers maximum value for our shareholders, enormous opportunities for our employees and a superior experience for our customers". Through this merger, many consumers and businesses will benefit from the new company with cutting-edge products that will broaden the technological platform in the media. Not only this merger will reduce competition, but also will add to Comcast the 11 million TWC subscribers, which will be totaled in around 30 million subscribers and will expand to Comcast’s geographic footprint in the media platform.

B) The critical issue is that Comcast, the biggest internet and cable provider in the nation, is seeking to become even bigger in merging with Time Warner Cable, the second biggest company in the market. This merger will increase the influence Comcast has on TV channels and internet content providers, leaving consumers with fewer alternatives and will reduce competition to the amount where Comcast will control two thirds’ of the cable TV market and about 40% of ...

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...lities of TWC. If this deal goes through, the acquiring corporation, Comcast, would expand in size and value dramatically, bringing its overall audience to 30 million households, while TWC ceases to exist as a separate corporation and ultimately all account balances of TWC would be adjusted and consolidated in the financial records of Comcast while TWC’s records will be closed out.

Conclusion:

The likely scenario is that shareholders will approve the merger at the end of 2014, but could be rejected by the Federal Communications Commission (FCC), considering the size of the market share they are getting out of the deal. Nevertheless, many sources suggest that legislators are already skeptical that the deal is any good for the markets, and with Comcast increasing influence in Washington, and an army of lobbyists already on the move, the result will remain to be seen.