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Charter Communications and Advance/Newhouse Partnership, the parent company of cable operator Bright House Networks, on Tuesday said they have reached a definitive agreement that will see Charter acquire Bright House for $10.4 billion.
Bright House is the sixth-largest cable operator in the United States and serves approximately 2 million video subscribers in central Florida, including Orlando and Tampa Bay, as well as Alabama, Indiana, Michigan, and California.
It is the latest pay TV deal as the industry consolidates. Comcast is waiting for a regulatory decision on its planned acquisition of Time Warner Cable, while AT&T is waiting for a decision on its planned purchase of DirecTV.
Charter and Advance/Newhouse will form a partnership, of which Charter will own 73.7 percent and Advance/Newhouse will own 26.3 percent. The consideration to be paid by Charter will include common and convertible preferred units in the partnership in addition to $2 billion in cash.
The deal is subject to several conditions, including Charter shareholder approval, the close of Charter’s previously announced transactions with Comcast that will make it the second-largest U.S. cable operator and regulatory approval.
Said Tom Rutledge, president and CEO of Charter: “Bright House Networks provides Charter with important operating, financial and tax benefits, as well as strategic flexibility. Bright House has built outstanding cable systems in attractive markets that are either complete, or contiguous with the New Charter footprint. This acquisition enhances our scale, and solidifies New Charter as the second largest cable operator in the U.S. I look forward to working with the Bright House team, whom we have known for years, in delivering great products and services to grow our market share.”
John Malone‘s Liberty Broadband owns a big stake in Charter. Its stake in the new, enlarged Charter is expected to amount to 19.4 percent.
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