Comcast To Buy Time Warner Cable In Equity Deal Worth $45.2 Bln - Quick Facts

(RTTNews) - U.S. cable giant Comcast Corp. (CMCSK, CMCSA) has agreed to acquire Time Warner Cable (TWC) for about $45.2 billion in equity value. As part of this friendly, stock-for-stock transaction, each Time Warner Cable share would be exchanged for 2.875 shares of CMCSA, equal to Time Warner Cable shareholders owning around 23 percent of Comcast's common stock, with a value to Time Warner Cable shareholders of nearly $158.82 per share based on the last closing price of Comcast shares.

The transaction would generate nearly $1.5 billion in operating efficiencies and would be accretive to Comcast's free cash flow per share while preserving balance sheet strength. Also, the merger would be tax free to Time Warner Cable shareholders.

Comcast said this transaction would create a world-class technology and innovation company, differentiated by its ability to deliver ground-breaking products on a superior network while leveraging a national platform to create operating efficiencies and economies of scale. Comcast also announced its plan to expand its buyback program by an additional $10 billion at the close of the deal.

"We believe there are meaningful operational efficiencies and the adjusted purchase multiple is approximately 6.7x Operating Cash Flow. This transaction will be accretive and will yield many synergies and benefits in the years ahead. Rob Marcus and his team have created a pure-play cable company that, combined with Comcast, has the foundation for future growth," according to Comcast.

As a result of this merger, Comcast would purchase Time Warner Cable's about 11 million managed subscribers. The new cable company, which would be headed by President and Chief Executive, Neil Smit, would generate multiple pro-consumer and pro-competitive benefits, including an accelerated deployment of existing and new innovative products and services for millions of customers. The deal may close by the end of 2014.