As expected, U.S. cable giant Comcast on Friday abandoned its $45.2 billion plan to acquire smaller rival Time Warner Cable (TWC) in the face of staunch opposition from competition authorities.
"Today, we move on," said Brian Roberts, CEO of Comcast, in a statement. "Of course, we would have liked to bring our great products to new cities, but we structured the deal so that if the government didn’t agree, we could walk away."
Sources cited by Bloomberg and The New York Times this week claimed that the two companies made a last-ditch attempt this week to win over the Department of Justice (DoJ) and the Federal Communications Commission (FCC), but to no avail.
"Throughout this process, we’ve been laser focused on executing our operating plan and investing in our plant, products and people to deliver great experiences to our customers. Through our strong operational execution and smart capital allocation, we are confident we will continue to create significant value for shareholders," said TWC chief executive Robert Marcus on Friday.
Comcast agreed to acquire TWC in February 2014, beating rival Charter Communications to a deal that had the potential to create a nationwide cable giant with a 57% share of the U.S. fixed broadband market and a sizeable lead in the cable TV market. At the time, the companies expressed confidence the deal would ultimately find favour with competition watchdogs because their networks do not overlap.
Nevertheless, opponents argued that the combination would give Comcast too much power in the broadband and TV markets.
"This is a huge victory for consumers," said a statement on Friday from John Bergmayer, senior staff attorney at consumer group Public Knowledge. "If Comcast had bought Time Warner Cable, it would have been able to stop new kinds of innovative video services dead in their tracks. Instead, the Federal Communications Commission and Department of Justice have decided to allow competition to work." ;
The termination of the Comcast-TWC merger also means the companies will no longer divest 3.9 million customers, 1.4 million of whom were due to be acquired by Charter.
The completion of that deal was a prerequisite for Charter’s $10.4 billion acquisition of smaller rival Bright House Networks.
For more on the Comcast-TWC merger that almost was, read this week’s Friday Review.
