New York, NY, United States (4E) – Comcast Corp. has reached an agreement with Charter Communications Inc. for Comcast to divest 3.9 million subscribers, a move seen that will help the company with its regulatory issues involving its $45bn planned acquisition of Time Warner Cable Inc.
Under the deal, Comcast will divest around 1.4 million existing Time Warner Cable customers directly to Charter for an estimated $7.3bn in cash.
Comcast is planning to form a new publicly traded company serving another 2.5 million existing Comcast subscribers. The new company will see Comcast shareholders controlling 67 percent, and Charter having a 33 percent stake. The new company would have an estimated enterprise value of $14.3bn, according to the two cable operators.
The deal also included a swap of 1.6 million Charter customers and 1.6 million Time Warner Cable customers in a like-kind exchange, which the companies said will improve their reach to other markets.
After the deals, Charter will have around 5.7 million video customers and manage another 2.5 million with its deal with the new company, according to a statement by Charter on Monday. The transaction will bring its total customers to 8.2 million video customers, or nearly double its existing total.