Charter buys Bright House for $10.4bn

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Deal is the latest in a wave of consolidation in the cable market in the US

Charter Communications has agreed to buy cable operator Bright House Networks for $10.4 billion in cash and stock.

Upon completion of the deal, Charter will become the second largest cable operator in the US. Bright House is the sixth largest cable operator in the US with about 2 million video customers in central Florida, Indiana, Michigan, Alabama and California.

The business will be conducted through a partnership of which Charter will own 73.7% and Advance/Newhouse – the parent company of Bright House Networks – will own 26.3%. 

In addition, Liberty Broadband has agreed to buy $700 million of shares in the combined entity, with an equity ownership of 19.4% of the outstanding shares, of which 26.3% will be owned by Advance/Newhouse.

Advance/Newhouse has also agreed to grant Liberty Broadband a voting proxy on its shares, capped at 6%, for five years after the close of the transaction, such that Liberty Broadband would have voting power of about 25% at closing. 

The deal, the latest in a wave of consolidation in the cable market in the US, is contingent on the completion of Comcast’s $45 billion takeover of Time Warner Cable. GTB