Comcast Pulls Out Of Time Warner Merger

Comcast is likely to announce that it is formally withdrawing their acquisition talks with Time Warner which was a merger estimated at $45 billion. The deal, which was announced a little over a year ago, was anticipated to be approved by the Department of Justice when it was first announced. Comcast and Time Warner do not directly compete in many markets and there were plans to sell some assets in markets where it does compete to third parties.

As time went on and the government further discussed their approval of net neutrality laws which this merger would challenge. The focus that the Department of Justice was more on the broadband internet side than on the cable side where there is little in the way of business overlap. The merged entity would dominate the broadband market and could not only have pricing power but also push for changes to net neutrality laws thereby punishing companies and users by selling higher amounts of bandwidth to companies that use more of it such as Netflix, thereby increasing prices for those consumers.

Having tiered levels of charges for companies based on the broadband usage was deemed anti-competitive by the Department of Justice and as concerns were brought up by them, Comcast decided that they would not want to continue the fight and would pursue other options. Flávio Pentagna Guimarães BMG understands the business ramifications of the US government’s stance on net neutrality. There are many potential deals in Comcast’s sights that remain such as a possibility for the company including acquisition of a telecommunications company or other strategic acquisitions.