Comcast Deal Collapse Would Kill Other Mergers in Domino Effect
How is that a bad thing?
(Bloomberg) -- The potential collapse of Comcast Corp.s merger with Time Warner Cable Inc. wouldnt just be a setback for those two companies. It would also unwind other pending deals and have a wide-reaching impact on the cable industry.
Staff attorneys at the Justice Departments antitrust division are nearing a recommendation to block Comcast.s plan to buy Time Warner Cable and combine the two largest U.S. cable providers, according to people familiar with the matter.
A rejection would be a blow to Comcast, which would have to give up on valuable cable and broadband assets in major U.S. cities including New York and Los Angeles. The $45.2 billion merger proposal is also a way for Philadelphia-based Comcast to fend off competition from phone companies, satellite providers and Web services like Netflix Inc. that have taken hundreds of thousands of its TV subscribers in recent years.
Another company has a lot at stake: Charter Communications Inc., the No. 4 in the industry. Charter, which counts billionaire John Malone as its largest investor, has agreed to take control of 3.9 million Comcast cable-TV customers to ease approval for the Comcast-Time Warner Cable merger. If that fails, Charter wont get those customers. Another Charter deal, the recent agreement to purchase of Bright House Networks, would also be in jeopardy.
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