Comcast & Charter Reach Deal Involving Subscriber Swap


PHILADELPHIA/STAMFORD: Comcast Corporation and Charter Communications have reached a deal for Comcast to divest itself of 3.9 million subscribers in a bid to help it smooth over regulatory concerns regarding its merger with Time Warner Cable.

As part of the agreement, Comcast will sell 1.4 million existing Time Warner Cable customers to Charter for an estimated $7.3 billion. This would increase Charter's base from 4.4 million to around 5.7 million, making it the second largest cable operator in the U.S. Charter and Comcast will each transfer approximately 1.6 million customers.

Comcast also plans to form and spin off to its shareholders a new publicly traded company (SpinCo) that will serve around 2.5 million existing Comcast customers. Comcast shareholders would own 67 percent of the new entity, while Charter owns 33 percent.

"[This] agreement follows through on our willingness to divest subscribers, while also marking an important step in our merger with Time Warner Cable," said Brian Roberts, the chairman and CEO of Comcast Corporation. "These transactions enable us to deliver meaningful value to our shareholders. The realignment of key cable markets achieved in these transactions will enable Comcast to fill in our footprint and deliver operational efficiencies and technology improvements. We look forward to working with the management teams at Time Warner Cable, Charter and the new entity to close these transactions and ensure a smooth transition for the customers and employees of all companies."

"Charter's new customers will benefit from our philosophy of providing highly valued products, featuring enhanced on-demand, interactive video and increased broadband speeds, all in a simplified package designed to provide better value and service," said Tom Rutledge, the president and CEO of Charter Communications. "The transactions announced today will provide Charter with greater scale, growth opportunities and improved geographical rationalization of our cable systems, which in turn will drive value for shareholders and more effective customer service. And through our meaningful ownership in and board representation at SpinCo, we can help it achieve similar market share growth in the markets it serves."