More M&A: Altice Buying Cablevision

Sept. 17, 2015
For years, cable trade press folks have joked amongst ourselves about mergers and acquisitions, saying that sooner or later there'll be only ...
For years, cable trade press folks have joked amongst ourselves about mergers and acquisitions, saying that sooner or later there'll be only one service provider and one vendor. Granted, that's just hyperbole, but lately it feels pretty real.

In the most recent bit of M&A, Luxembourg-based multinational cable and telecommunications company Altice (Euronext:ATC, ATCB) and Cablevision (NYSE:CVC) have entered into a definitive agreement for Altice to acquire Cablevision. Under the agreement, Altice will pay $34.90 in cash for each Cablevision share, for a total of approximately $17.7 billion. The transaction is expected to close in the first half of 2016, subject to regulatory approval.

In a statement, Altice Founder and President Patrick Drahi said: "As a family business, we are proud to be entrusted by the Dolan family with the ownership of Cablevision and look forward to continuing the pioneering path they have paved for us. The strategy of Altice in the large and highly strategic U.S. market is reinforced with the acquisition of Cablevision. We will be in a stronger position, as in all other markets in which we operate, to deliver the best services, invest in the most advanced technology, and develop innovative products for the benefit of our customers."

Cablevision CEO James L. Dolan's statement said, in part: "Since Charles Dolan founded Cablevision in 1973, the Dolan family has been honored to help shepherd our customers and employees through the most extraordinary communications revolution in modern history. Now, nearly half a century later, the time is right for new ownership of Cablevision and its considerable assets. We believe that Patrick Drahi and Altice will be truly worthy successors, and we look forward to doing all we can to affect this transition for our customers and employees. We expect that Cablevision will be in excellent hands."

The acquisition also includes:

  • Lightpath, Cablevision's business services unit
  • News 12 Networks
  • Newsday Media Group
  • Cablevision Media Sales

The Dolan family, majority owners of Cablevision, will retain AMC Networks and The Madison Square Garden Company.

The Cablevision deal is Altice's second in the U.S. market, following the $9 billion acquisition of Suddenlink, which was announced in May. Assuming both deals go through - the Suddenlink transaction is expected to close in the fourth quarter - together both operators would represent the fourth largest cable operation in the United States. While operating with independent capital structures, Cablevision and Suddenlink will draw upon management from both companies.

Cablevision serves the New York metropolitan area (New York, New Jersey and Connecticut), with a network passing more than 5 million premises and more than 3.1 million residential and business customers. Approximately 65% of its cable customers subscribe to triple-play services.

Other M&A activity either completed or still in play among U.S. cable operators includes the pending acquisition of Time Warner Cable (NYSE:TWC) and Bright House Networks by Charter Communications (NASDAQ:CHTR), backed by John Malone's Liberty Global (NASDAQ:LBTYA). In June, Grande Communications in Texas acquired Centrovision. Comcast's (NASDAQ:CMCSA) bid to buy TWC collapsed in April, largely because of regulatory concerns.

In the vendor space, Ericsson (NASDAQ:ERIC) recently announced plans to buy Envivio (NASDAQ:ENVI), Verimatrix boughtConcurrent's (NASDAQ:CCUR) multiscreen video analytics business, and Amazon (NASDAQ:AMZN) is buyingElemental Technologies.