Comcast Corporation (NASDAQ:CMCSA) have announced through their website about the termination of their agreement between them and Time Warner Cable Inc (NYSE:TWC). The merger has now officially dissolved.
CEO of Comcast, Brian L. Roberts released a statement in their website. In the statement, he mentions that the company has decided “to move on” after the government had refused to cooperate with this deal. He also believes that Comcast NBCUniversal is gaining strong momentum and he has thanked his employees of both the parties included in this deal for their “tireless efforts”.
He remains excited for the times to come.
The deal, which was well surrounded by controversies, was already threatened by the Department of Justice and the Federal Communications Commission. Nevertheless, the industry analysts had considered that loosing assets by Comcast could be necessary if they wanted to see their agreement secured and uninterrupted by the DOJ. Clearly though, Comcast never had the intention of doing anything similar.
The DOJ had blocked the merger on antitrust grounds. Comcast could have pursued the case with intentions to win it. However, at the same time, it could have drained both precious time and resource of both the companies involved. The easiest way forward seemed to be to dissolve the merger entirely.
The two telecommunications companies had proposed to create a single operator, which could have controlled nearly 67% of the entire US internet connections. It could also provide cable television services to more than 25% of the entire American market.
Comcast Corporation (NASDAQ:CMCSA) could receive $1.35 billion from Time Warner as a reverse termination fee, often known as the breakup fee. This fee is received by the smaller partner involved in the merger in case such a massive deal fails.
The moment their merger intentions were disclosed, critics had questioned about the future outcomes this merger could have, when it comes to consumer benefits. A large company enjoying 67% of the entire market could essentially be considered as a ‘monopoly’.