While the Federal government continues to attempt a solution to the Comcast Corporation (NASDAQ:CSMCA) / Time Warner Cable Inc (NYSE:TWC) merger, the companies involved appear to have their own ideas about how to proceed. Charter Communications Inc. (NASDAQ:CHTR), a cable company with more than 6 million subscribers in the United States, is said to have a reached a deal with Comcast to acquire 1.5 million of the company’s subscribers.
According to Bloomberg, which quoted sources familiar with the formulation of the deal, Charter Communications Inc. (NASDAQ:CHTR) will take the 1.5 million subscribers along with half of a joint venture with about 2.5 million subscribers. The deal is obviously a complex one, and it adds new dimensions to the Comcast / Time Warner Cable merger.
Charter buys customers from Comcast
Charter Communications Inc. (NASDAQ:CHTR) will pay $20 billion to Comcast Corporation (NASDAQ:CSMCA) for the subscribers and the stake in the new company according to the sources familiar with the terms of the deal. The deal has not yet been set in stone, and it may fail according to the same people.
The formation of the new company and the sale of subscribers is not the only thing that the new deal will bring with it, according to Bloomberg. Charter Communications Inc. (NASDAQ:CHTR) and Comcast Corporation (NASDAQ:CSMCA) will also seek to transfer assets in order to facilitate strength in specific geographic areas. Comcast would reportedly take Charter’s Los Angeles customers.
Federal regulators run into cable problems
Federal regulators are going to have a tough time figuring out what the US cable industry will look like if Comcast Corporation (NASDAQ:CSMCA) gets its way, never mind its attempts to determine whether the firm’s map for the US cable industry is uncompetitive or not. With the Comcast / Time Warner deal already under scrutiny, any agreement with Charter Communications Inc. (NASDAQ:CHTR) will add a dimension of complexity.
Comcast Corporation (NASDAQ:CSMCA) may have a simplification of that deal in mind with the Charter Communications agreement, however. The company is shedding a lot of customers the deal, and that may be enough for regulators to see the new Comcast-Time Warner as less of a threat to US consumers.