Comcast Corporation (Nasdaq:CMCSA) (Nasdaq:CMCSK) and Time Warner Cable (NYSE:TWC) today announced that their Boards of Directors have approved a definitive agreement for Time Warner Cable to merge with Comcast.
The agreement is a friendly, stock-for-stock transaction in which Comcast will acquire 100 percent of Time Warner Cable’s 284.9 million shares outstanding for shares of CMCSA amounting to approximately $45.2 billion in equity value.
Each Time Warner Cable share will be exchanged for 2.875 shares of CMCSA, equal to Time Warner Cable shareholders owning approximately 23 percent of Comcast’s common stock, with a value to Time Warner Cable shareholders of approximately $158.82 per share based on the last closing price of Comcast shares.
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The transaction will generate approximately $1.5 billion in operating efficiencies and will be accretive to Comcast’s free cash flow per share while preserving balance sheet strength. The merger will also be tax free to Time Warner Cable shareholders.
This transaction is expected to create a leading technology and innovation company, differentiated by its ability to deliver new products on a superior network while leveraging a national platform to create operating efficiencies and economies of scale.
The companies said the merger agreement between Comcast and Time Warner Cable is subject to shareholder approval at both companies and regulatory review and other customary conditions and is expected to close by the end of 2014.