Comcast and Time Warner spent over half a billion on failed merger

Comcast and Time Warner spent over half a billion on failed merger
According to Comcast's most recent earnings report, the cable giant has spent over $330 million in 'transaction-related costs' in its attempt to acquire Time Warner Cable, and Time Warner has spent over $220 million.

Comcast proposed to buy TWC in February 2014 for $45.2 billion and just canceled the proposed merger last month after it became clear it would never make it through Federal regulators.



In the Q1 alone, ended March 31st, Comcast had $99 million in costs related to the acquisition, and Time Warner Cable had $24 million in costs.

"The costs are mainly for legal fees and outside consulting firms--everything from Human Resources and IT consulting to banks and management consulting services," said Comcast VP of Government Communications Sena Fitzmaurice. "Communications and lobbying fees would be included--however, what is included has to be direct and incremental--so only those fees that are directly and incrementally associated with the deal."

At least there was one positive for Comcast shareholders: no break-up fee. The company says the deal was structured without an expensive break-up fee involved, which can sometimes reach into the billions. One recent example is AT&T's failed purchase of rival carrier T-Mobile in 2011. When the DOJ killed the merger, AT&T had to pay T-Mobile $4 billion in cash and spectrum, effectively reviving the carrier and allowing it to go on the offensive with pricing.

Source:
Ars


Written by: Andre Yoskowitz @ 4 May 2015 22:00
Tags
Comcast acquisitions Time Warner Cable
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  • 2 comments
  • hearme0

    No sympathy, NONE for these jagoff companies!

    First off, I said from the first article written that this ain't goin' thru!!! DOJ will stop this in a heartbeat. And again...I was right!

    It's an unfair, competition-squashing buyout and anyone with half a brain said this wasn't going through.

    What pisses me off to no end is the money wasted and I only need like 10 or 20 grand to free me financially for a while, yet these bastards wasted a half billion in an attempt to complete a merger they FRAKKING KNEW WOULDN"T GO THROUGH! They merely "hoped"

    This is very much like the ATT/Tmobile merger. Except theirs wasn't nearly as competition-stifling as this would have been. Neither should be allowed. Finally! The U.S.A. is doing right by ourselves.

    5.5.2015 12:02 #1

  • aw2600

    Both companies will have to raise their prices to offset the costs of the failed merger. The consumer always gets the short end of the stick.

    5.5.2015 15:29 #2

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