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Comcast to drop Time Warner Cable mega-merger: Report

Reports suggest that Comcast has killed off its purchase of Time Warner Cable before regulators looked at the deal.
Written by Chris Duckett, Contributor

US cable giant Comcast is reportedly preparing to abandon its plan for a mega-merger with rival Time Warner Cable in the face of opposition from antitrust regulators.

Bloomberg News, citing unnamed sources, said on Thursday that a formal announcement of the scrapping of the $45 billion deal could come on Friday in the US.

The two companies did not comment on the report.

The news comes amid heightened scrutiny over the deal, which would boost the dominance of Comcast as a broadband and cable television provider in the US market.

First proposed in February last year, the purchase would have involved Comcast swapping 2.875 shares for each Time Warner Cable share. At the time, Comcast said approximately $1.5 billion would be saved by the merger of the two cable giants.

A number of consumer groups have also opposed the deal, saying it would give too much market power to a single conglomerate.

Netflix told its shareholders in April 2014 that the merger would be anticompetitive, as it would give one company control of 60 percent of the US residential broadband market and allow Comcast to charge "unprecedented fees".

Comcast and TWC -- spun off in 2009 from media giant Time Warner -- had argued that the deal would not hamper competition because their territories have little overlap. They also said that cable is getting increasing competition from video-streaming services.

If allowed to proceed, the deal would give the combined firm more than 30 million customers over a large swath of the United States. Comcast had previously said that it would shed 3 million current subscribers in order to gain 8 million customers from TWC.

It would also give Comcast a unique position because of its ownership of NBCUniversal -- which includes the NBC television network and other channels -- creating a potential for conflict with other carriers.

Earlier this week, reports said staff at the Federal Communications Commission had called for a hearing on the merger.

In March, Comcast announced that its then-CFO Michael Angelakis would step down to take the reins of a new company intended to invest and operate "entrepreneurial ventures".

Comcast said at the time that the acquisition of TWC would make it too large to nurture growth businesses.

With AAP

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