Time Warner, Comcast to buy Adelphia

Time Warner and its bidding partner, Comcast, said today that they had reached an agreement to acquire Adelphia Communications for a total of $12.7 billion in cash and 16 pc of the common stock of Time Warner’s cable subsidiary.

Adelphia, the fifth-largest cable TV operator in the United States, has been in bankruptcy protection since 2002, and the deal is subject to the customary regulatory review and the bankruptcy judge. Time Warner and Comcast said they expected the deal to close in nine to 12 months. Their offer beat out a bid by Cablevision Systems.

The deal will be Time Warner’s first major acquisition since its disastrous merger with AOL in 2000, and will be the rapidly shrinking Cable industry’s latest move to offer not just television, but also high-speed Internet and telephone services.

As part of the deal, Comcast will redeem its 21% interest in Time Warner Cable and pay about $1.5 bn in cash, getting 1.8 mn cable subscribers in exchange. —NYT