A Comcast logo on a Comcast installation truck in Pittsburgh.(Photo: 2011 photo by Gene J. Puskar, AP)
Comcast Corp. is preparing to announce that the company will abandon its attempt to buy Time Warner Cable, according to several reports.
Citing unnamed sources, Bloomberg News said Thursday Comcast could make the announcement as soon as Friday in the face of serious concerns by federal regulators about its proposal to pay $45 billion to buy TWC and consolidate the nation's two largest cable companies. CNBC and The New York Times had similar accounts..
Comcast and TWC declined to comment.
If Comcast abandons its plans, it'd be a huge blow to the cable giant that had bet on the deal to gain customers in key markets, including New York and Los Angeles. It sought to broaden its reach nationally as streaming video and broadband Internet upend the cable video business. If Comcast had completed the deal, the post-merger company would have gained access to nearly half of the Internet market nationwide and heightened its bargaining leverage against content creators and cable networks
Comcast announced its plan to buy TWC in February, 2014, triggering immediate and loud opposition from consumers and advocacy groups who worry that it would give one company too much clout in pay-TV and Internet services. The companies structured the agreement with no breakup fee if the merger weren't approved or either side abandons the effort.
TWC shares fell 0.6% Thursday to end at $148.76, while Comcast rose 0.8% to $59.23. Shares of both companies initially were up about 1.4% in after-hours trading. But at 5 p.m., Comcast was back near Thursday's closing price, while TWC was up 0.3% at $149.13.
Comcast held a series of meetings with the Department of Justice and the Federal Communications Commission Wednesday, the government entities that have reviewed the deal and are close to making their decisions.
That the deal is in trouble has been apparent since late last week, when Bloomberg News first reported that the DOJ was leaning against the deal. Officials at the FCC have also have recommended issuing a "hearing designation order" for the deal, which would let an administrative judge decide on its merits, according to The Wall Street Journal. That is often fatal for such transactions.
In the wake of those developments, a number of Wall Street analysts proclaimed the deal dead.
Consumer groups began issuing celebratory statements late Thursday afternoon. "This proposed merger was bad news from the beginning," said Craig Aaron, CEO of Free Press. "Giving one company control over so much of America's communications isn't pro-competition and it most certainly isn't pro-consumer."
Sen. Al Franken (D-Minn.), who has been one of the most prominent opponents of the deal since the beginning, said he was "glad" to see opposition build over the last 15 months. "We need more competition in this space, not less. If reports of the collapse of the deal are true, it would be a huge victory for American consumers," he said in a statement.
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