Comcast and Time Warner Cable’s merger is now facing vehement opposition and regulatory delays. But the two companies’ bid to unite has been a long time coming.
On Wednesday, executives from the two companies are expected to sit down with Justice Department officials to discuss the proposed $45 billion deal. If passed, it would combine the country’s No. 1 and No. 2 cable providers into one entity, giving them control of nearly 30% of the pay TV market. Recent reports suggest regulators are against the mega-merger for fear it would put too much power into the hands of one company. But if it were to ultimately pass, this would be no shotgun wedding: The two cable and broadband providers have been involved in a years-long — albeit on-again, off-again — courtship. Here are some of the highlights.
I just called to say I love you (via AT&T). In 2002, Comcast (CMCSA) acquired AT&T’s (T) cable operations for $47 billion. As part of the deal, Comcast inherited AT&T’s 21% stake in a Time Warner unit that included the latter company’s cable operations (that’s right, Comcast owned approximately one-fifth of Time Warner’s cable business over a decade ago).
Let’s call the whole thing off. By the time 2004 rolled around, Comcast and Time Warner announced a plan to reduce Comcast’s interest in Time Warner Cable (TWC). According to the companies, this “mutually beneficial outcome” had been part of the plan all along.
Bizarre love triangle. In 2005, Comcast and Time Warner jointly acquired the assets of Adelphia Communications. As part of the deal, Time Warner Cable and Comcast agreed to swap “certain cable systems” to “enhance their respective geographic clusters of subscribers.” Also part of the deal: Time Warner redeemed Comcast’s remaining interest in its cable unit.
Breaking up is hard to do. Just one year later, in 2006, another union was formed between the two companies. In addition to Comcast and Time Warner Cable, the joint venture — whose stated mission was to accelerate the convergence of video entertainment, wireline and wireless data and communications products and services — also included Sprint Nextel, Cox Communications and Advance / Newhouse Communications.
Put a ring on it. Fast forward to 2014 and Comcast and Time Warner Cable (which by then had been spun out into an independent company) announced that they had signed an agreement to merge in a friendly, stock-for-stock transaction in which Comcast would acquire 100% of Time Warner Cable’s shares.
The waiting is the hardest part. The deal, however, has faced massive opposition and it could be months before federal regulators reach a decision. That’s why, in late January, Comcast and Time Warner Cable extended the end date of their merger agreement by an additional six months to August 12, 2015 — a full one and a half years after the two companies reached their agreement. At least for the moment, though, their romance doesn’t seem to be fizzling out.
