Tomahawk, WI 02/17/2014 (BasicsMedia) – The board of directors at Comcast Corporation (NASDAQ:CMCSA) and Time Warner Inc. (NYSE:TWX) have come to an agreement for the merger of the two entities in a deal that is expected to cost Comcast $45.2 billion. Comscast intends to use the new acquisition in its effort of creating a dominant force in the delivery of entertainment. The deal is expected to come to a conclusion by the end of the year awaiting shareholder and regulatory approval.

The two companies currently command a huge customer base which is expected to total 30 million with the companies expected to maintain their stronghold markets in New York Chicago and Los Angeles. Once the deal closes, Comcast Corporation (NASDAQ:CMCSA) intends to divest 3 million of its 22 million pay TV customers with Time Warner contributing 11.2 million customers. Divesting of the customers is one of the ways that will accelerate the approval of the deal with authorities.

The $45.2 billion acquisition price by Comcast Corporation (NASDAQ:CMCSA) amounts to 158.82 per share which was 17% higher compared to Time Warner Inc. (NYSE:TWX) stock’s price on February 19, 2014. This is slightly above Charter Communications Inc. initial offer of $132.50 per share. It is being reported, that Charter had been pursuing Time warner for quite some time but their offer was rejected as Time Warner CEO Rob Marcus perceived it as a low ball.

Comcast Corporation (NASDAQ:CMCSA) was in the background for quite some time looking for opportunities to purchase subscribers that combined charter and Time warner. Charter had planned to purchase Time Warner at the back of a new $25 billion debt; the company had planned to sell some of its territories as a way of clearing the debt.

Comcast strong holds in the market include Boston, Washington and some parts of Philadelphia while Time warner controls areas of New York Los Angeles Milwaukee and Dallas. Comcast and Time Warner Inc. (NYSE:TWX) expect to face competition from AT&T Inc. (NYSE:T) and Verizon Communications Inc. (NYSE:VZ) which currently provide Pay TV services and Internet hookups. AT&T and Verizon are growing faster, a challenge the new merger will need to address as soon as possible, if it is to maintain a good market share.

Under the agreement, Time Warner Inc. (NYSE:TWX) shareholders are expected to receive 2.875 of Comcast share for each Time Warner share they hold as soon as the purchase deal goes through

Comcast Corporation (NASDAQ:CMCSA) closed Friday trading session at a high of $53.70, moving up by 1.39% when compared to Thursday trading session.

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