US cable groups merge to create $ 97 bn giant

LONDON, Mar 22: US cable giants Comcast and MediaOne Group announced a $60-billion merger on Monday to create the world's largest broad-b...

LONDON, Mar 22: US cable giants Comcast and MediaOne Group announced a $60-billion merger on Monday to create the world’s largest broad-band communications group. Comcast, which controls the home shopping channel QVC, and MediaOne are the third- and fourth-largest domestic cable providers and together serve 11 million customers in 18 million homes.

Comcast/MediaOne will have a combined capitalisation of $97 billion and focus on the video, voice and data markets. "The new company will have the size and scope to lead the evolving broad-band environment," Comcast president Brian Roberts said.

MediaOne (UMG) shareholders will control around 64 per cent of the merged entity after the all-stock deal, receiving 1.1 Comcast (CMCSK) shares or $80.16 for each MediaOne share. The deal represents a 32 per cent premium on MediaOne’s $60.75 closing price on March 19. Its stock has surged 50 per cent since January.

Comcast president Ralph Roberts will become chairman of Comcast/MediaOne while Brian Roberts is tobecome president of the new entity. MediaOne chairman Charles Lillis will be vice-chairman of the group. Comcast has focused on its core cable business after selling its cellular phone business to SBC Communications (SBC) in January. MediaOne has been seeking a media partner after being spun off by telecom operator US West at the end of last year.

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