Tuesday 26 May 2015 7:11 am

Charter Communications confirms $55bn takeover of Time Warner Cable

Charter Communications has finalised its $55bn (£36bn) takeover of Time Warner Cable.

The cable mega-deal, which valued Time Warner Cable at $78.7bn, will create the second-largest cable and broadcasting company in the US behind industry leader Comcast.

Backed by billionaire media investor John Malone, Charter has beaten Comcast to the cable business with a superior bid to the $45bn it offered in January 2014. The winning offer values each Time Warner Cable share at $195.71 – 14 per cent above its close price on Friday.

Charter has also acquired smaller cable operator Bright House Networks for $10.4bn. Together the three groups will form a new parent company New Charter.

Read more: Malone-backed Charter swoops for Time Warner

Tom Rutledge, who will take on the role as president of New Charter, commented:

With our larger reach, we will be able to accelerate the deployment of faster internet speeds, state-of-the-art video experiences, and fully–featured voice products, at highly competitive prices. In addition, we will drive greater competition through further deployment of new competitive facilities-based WiFi networks in public places, and the expansion of the facilities footprint of optical networks to serve the large, small and medium sized business services marketplace.

New Charter will capitalise on technology to create and maintain a more effective and efficient service model. Put simply, the scale of New Charter, along with the combined talents we can bring to bear, position us to deliver a communications future that will unleash the full power of the two-way, interactive cable network.

Chief executive of Time Warner Cable Robert D. Marcus added that the combination of the two companies will "provide enormous opportunities for our 55,000 dedicated employees".

Malone's Liberty Broadband, Charter's largest shareholder, has agreed to buy $4.3bn of new shares in New Charter.

Investors seemed pleased with the move: Charter's share price was up by almost five per cent in pre-market trading on the Nasdaq.