Lexington, KY – Charter Communications and Comcast announced a deal Monday that would transfer cable and Internet service in areas of Kentucky currently covered by Time Warner to Charter.
Lexington, Louisville and other areas currently getting Time Warner Cable will see their service provided by St. Louis-based Charter as part of a large swap and restructuring aimed at making the proposed Time Warner Cable absorption into Comcast palatable for regulators.
“Yesterday’s announcement is a win-win-win and moves us one step closer to completing our merger with Comcast. We're pleased that the parties have reached agreement and look forward to working with Comcast and Charter to make all of the transactions as seamless as possible for our employees and our customers,” said Time Warner Cable spokesman Mike Hogan.
The swap of Kentucky employees and customers comes along with Charter’s deal with Comcast to gain Time Warner customers in parts of Wisconsin, Ohio, Indiana and Alabama. Current Comcast customers in those states as well as Minnesota and Tennessee will see their service covered by a new spin off company, two-thirds of which will be owned by current Comcast and Time Warner Cable shareholders with the remaining third to be owned by Charter.
Comcast will pick up current Charter customers in Los Angeles, New York state, western Massachusetts, North Carolina, South Carolina and parts of the Texas and Georgia markets, according to a report from Reuters.
The deal will make Charter the second largest cable company in the nation, while also resulting a net loss of customers for the combined Comcast/Time Warner company post merger. The post merger will keep the new entity from serving more than 30 percent of the nation’s cable subscribers, which proved to be an area of concern for the merger deal announced in February.
The Charter/Comcast deal has been approved by both companies' boards of directors, while the Time Warner board is bound to agree to the deal under the planned merger.
The Comcast/Time Warner deal came at a time earlier in the year when Charter was attempting a hostile takeover of Time Warner Cable stock and its board to force buyout negotiations.
The Comcast/Charter transaction is subject to a number of conditions, including the closing of the Comcast/Time Warner Cable merger, anti-trust requirements, FCC and other regulatory approvals, Charter shareholder approval and various other matters, according to a release from Charter.
The companies have not given indication on when cable subscribers would see their service change. At the time of the Comcast/Time Warner deal in February, those companies stated that the deal was expected to close by the end of this year.