Charter Strikes $55 Billion Deal for Time Warner Cable

STAMFORD/NEW YORK: Charter Communications has entered into a deal to merge its assets with Time Warner Cable (TWC), in an agreement that values TWC at $78.7 billion.

Charter will provide $100 in cash and shares of a new public parent company, New Charter, equivalent to 0.5409 shares of Charter for each TWC share outstanding. This puts a value on each TWC share at about $195.71.

Additionally, Charter and Advance/Newhouse Partnership have amended their previously signed agreement whereby Charter will acquire Bright House Networks for $10.4 billion. The amended deal sees Charter and Advance/Newhouse form a new partnership, of which New Charter will own around 87 percent and Advance/Newhouse will own the remaining shares.

Upon the closing of the TWC transaction, Liberty Broadband Corporation has agreed to purchase $4.3 billion of newly issued shares of New Charter for a price equivalent to $176.95 per Charter share. Upon the closing of the Advance/Newhouse deal, Liberty will purchase $700 million of newly issued Charter shares at a price equivalent to $173 per Charter share.

The combination of Charter, Time Warner Cable and Bright House will create a leading broadband services and technology company serving 23.9 million customers in 41 states across the U.S.

New Charter will be led by Tom Rutledge, who will serve as president and CEO.

"The teams at Charter, Time Warner Cable and Bright House Networks are filled with the innovators of our industry. Representatives of each of these companies have invented some of the most revolutionary communications products ever created; innovations like video on demand, VOIP phone service, remote storage DVR, cable TV through an app, downloadable security and the first backward-compatible, cloud-based user interface," said Rutledge, the president and CEO of Charter Communications. "That spirit of innovation will live on, and it will create real benefits and great long-term value for the customers, shareholders and employees of all three companies. With our larger reach, we will be able to accelerate the deployment of faster internet speeds, state-of-the-art video experiences and fully featured voice products, at highly competitive prices. In addition, we will drive greater competition through further deployment of new competitive facilities-based WiFi networks in public places, and the expansion of the facilities footprint of optical networks to serve the large-, small- and medium-sized business-services marketplace. New Charter will capitalize on technology to create and maintain a more effective and efficient service model. Put simply, the scale of New Charter, along with the combined talents we can bring to bear, position us to deliver a communications future that will unleash the full power of the two-way, interactive cable network."

"With today's announcement, we have delivered on our commitment to maximizing shareholder value," commented Robert D. Marcus, the chairman and CEO of Time Warner Cable. "This agreement recognizes the unique value of Time Warner Cable, and brings together three great companies that share a common philosophy of strong operations, great products, robust network investment and putting customers first. This combination will only accelerate the great operating momentum we've seen over the last year and provide enormous opportunities for our 55,000 dedicated employees. We remain wholly committed to bringing the very best experience to our residential and business customers coast to coast."

"Today's announcement is good news for customers and potential customers, as well as our employees, since we will be in a stronger position to deliver competitive services, invest in advanced technology, and develop innovative products that will compete with global and national brands," added Steve Miron, the CEO of Bright House Networks. "In addition, I am very pleased that Tom Rutledge will be the CEO of the new company. Tom recognizes the importance of placing a high-priority focus on customer care drawing from the expertise of all three companies, and I believe this will be a strong pillar of the new company's culture."