The deal values Time Warner Cable at about $69 billion including net debt, or 8.3 times its estimated 2014 earnings before interest, taxes, depreciation and amortization.
It's hard to believe this deal will be a slam dunk, by any means, though, considering its size. It will merge the nation's no. 1 and no. 2 cable companies. Considering that the DOJ would not allow no. 2 wireless carrier AT&T to acquire no. 4 T-Mobile USA, it's easy to see there could be some issues with the deal. Unlike that deal, though, John Demming, a Comcast spokesman, said there is no breakup fee on the transaction.
Charter Communications had been courting TWC since June of last year. People familiar with the matter said that the Comcast-TWC caught Charter flat-footed, as Comcast and Charter had been negotiating an asset sale after a potential Charter acquisition of TWC. Sources said it is unlikely that Charter would match Comcast's offer, and that instead it might look to acquire any assets Comcast would opt to sell.
Critics say the merger would reduce competition in the cable industry. Advocates say that larger companies have better leverage when it comes to negotiating with content providers.
In early morning trading, Comcast shares were at $53.39, down $1.85 or 3.35 percent. TWC shares were at $144.89 , up $9.58 or 7.08 percent.