Altice’s Cablevision transaction
After the completion of the merger of Charter Communications (CHTR), Time Warner Cable (TWC), and Bright House Networks, the US cable industry is moving toward further consolidation. According to Altice (ATCEY), it is expected to acquire Cablevision (CVC) “by the end of the month,” as reported by Reuters.
On June 16, 2016, both companies accepted the conditions laid down by the New York Public Service Commission (or PSC) for the deal. The Reuters report noted that this approval by the PSC was “the final regulatory hurdle to complete the transaction.”
Altice signed the agreement for the Cablevision acquisition in September 2015. Altice noted that the value of the Cablevision transaction is ~$17.7 billion, and Cablevision shareholders will get $34.90 per share in the deal. The company’s cable customer relationships are in New York, Connecticut, and New Jersey.
The Cablevision transaction marks the second expansion of Altice in the US cable space. The company had completed the acquisition of Suddenlink earlier in December 2015. The transaction value of this deal was ~$9.1 billion, according to Altice. Suddenlink’s key operating areas include Arkansas, Arizona, Louisiana, Oklahoma, North Carolina, Texas, and West Virginia.
Altice’s customer base in the US with the Cablevision transaction
At the end of 1Q16, Suddenlink and Cablevision had ~1.6 million and ~3.1 million customer relationships, respectively. After completion of the Cablevision transaction, Altice will have the fourth-largest cable customer base in the US, after third-place Cox Communications. The top two US cable players are Comcast (CMCSA) and the new Charter Communications.
For diversified exposure to some of the top cable companies in the US, you may consider investing in the SPDR S&P 500 ETF (SPY). This ETF held a total of ~0.9% in Comcast (CMCSA) and Cablevision (CVC) at the end of May 2016.