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European firm Altice to buy Cablevision for $17.7 bn in fast-consolidating US cable market
MUMBAI: The cable TV landscape in the US is in for a dramatic change. European company Altice has suddenly got excited about the American cable market and announced its purchase of Cablevision for $17.7 billion.
The deal makes Altice, controlled by French billionaire Patrick Drahi, the fourth-largest cable firm in America. Cablevision will give the European company 3.1 million business and residential customers. In May, Altice had acquired Suddenlink Communications, a regional US cable company, for $9.1 billion.
After the approval of the deal, Altice will have 3.7 million video subscribers. The other top companies are Comcast, Time Warner Cable-Charter Communications and Cox Communications.
Under the deal, Altice will pay $10 billion in cash and assume $7.7 billion of debt. The deal is expected to close in the first half of 2016.
For Altice, the expansion in the US is not the end. The company has said that it is interested to acquire other cable companies and even mobile networks.
The acquisition marks the exit of the Dolans, who started Cablevision in 1973. In a fast-consolidating cable market, Cablevision CEO James Dolan had already indicated that the company could be a prime acquisition target amid the combination of Time Warner Cable and Charter Communications Inc.
Cablevision reported revenue of $6.5 billion in the previous fiscal. But with ‘net neutrality’ regulations and cable ‘cord-cutting’ becoming a wider practice, achieving scale in cable alone has become impossible. It is most likely that Altice will want to become a strong wireless company as well.
The consolidation wave in the US has been a matter of concern for consumers about the increasing clout of the biggies in influencing prices. While John Malone’s Charter Communications has agreed to buy Time Warner Cable, AT&T recently completed a $48.5-billion acquisition of the satellite television operator DirecTV. According to SNL Kagan, Comcast, Charter-Time Warner Cable and Altice would control 81.2 per cent of the cable broadband market in the US.
Charles Dolan, 88 years old and father of James, founded Home Box Office (HBO) and built cable systems as early as the 1960s. HBO is now owned by Time Warner Inc. The Dolans still own other media assets like AMC Networks, a cable channel company, and Madison Square Garden Company, which owns New York Knicks basketball team and the New York Rangers hockey team.