Comcast Corporation (Nasdaq: CMCSA, CMCSK) and Time Warner Cable (NYSE: TWC) announced that their Boards of Directors have approved a definitive agreement for Time Warner Cable to merge with Comcast. The agreement is a friendly, stock-for-stock transaction in which Comcast will acquire 100 percent of Time Warner Cables 284.9 million shares outstanding for shares of CMCSA amounting to approximately US$45.2 billion in equity value. Each Time Warner Cable share will be exchanged for 2.875 shares of CMCSA, equal to Time Warner Cable shareholders owning approximately 23 percent of Comcasts common stock, with a value to Time Warner Cable shareholders of approximately US$158.82 per share based on the last closing price of Comcast shares.The transaction will generate approximately US$1.5 billion in operating efficiencies and will be accretive to Comcasts free cash flow per share while preserving balance sheet strength. The merger will also be tax free to Time Warner Cable shareholders.The transaction will create a leading technology and innovation company, differentiated by its ability to deliver ground-breaking products on a superior network while leveraging a national platform to create operating efficiencies and economies of scale.”The combination of Time Warner Cable and Comcast creates an exciting opportunity for our company, for our customers, and for our shareholders. In addition to creating a world-class company, this is a compelling financial and strategic transaction for our shareholders. Also, it is our intention to expand our buyback program by an additional US$10 billion at the close of the transaction. We believe there are meaningful operational efficiencies and the adjusted purchase multiple is approximately 6.7x Operating Cash Flow, said Brian L. Roberts, Chairman and Chief Executive Officer, Comcast Corporation.
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