Comcast Corp. agreed to acquire Time Warner Cable Inc. for about $44 billion, combining the largest two U.S. cable companies in an all-stock deal, according to four people familiar with matter.
Comcast is paying about $159 a share in the transaction, which will be announced this morning, said the people, who asked not to be named because the negotiations were private.
Comcast beat rival Charter Communications Inc. to what is the second-largest cable-television acquisition by equity value, according to data compiled by Bloomberg. Stamford, Conn.-based Charter, the fourth-largest U.S. cable company, had offered about $132.50 a share to Time Warner Cable's management, a bid that was rejected.
Time Warner Cable had asked for $160 a share in its counterproposal to Charter. D'Arcy Rudnay, a spokeswoman for Comcast, and Bobby Amirshahi, a spokesman for Time Warner Cable, didn't immediately respond to requests for comment.
A tie-up between Comcast and Time Warner Cable would face tough scrutiny from the Federal Communications Commission, Craig Moffett, an analyst at MoffettNathanson LLC, said in an interview in January. The merged company would account for almost three-quarters of the cable industry, according to the National Cable Television Association.
Last month, Time Warner announced fourth-quarter profit that beat estimates and said it will add 1 million residential customers in the next three years. It lost 217,000 residential video subscribers in the fourth quarter, hurt by competition from AT&T Inc., Verizon Communications Inc. and streaming services such as Netflix Inc. The larger Comcast added 43,000 television customers in the same period.
Time Warner Chief Executive Officer Robert Marcus said Jan. 31 that while mergers could produce benefits, Charter isn't a good fit, he said in a Jan. 31 interview on Bloomberg Television. Marcus would prefer to work with Comcast CEO Brian Roberts rather than billionaire John Malone, the backer of Charter, a person with direct knowledge of the matter said in November.