Comcast Corp. said Wednesday it will get $1 billion in new financing from TWC and a new cable provider to expand its cable network, making it the largest investor in the $4.6 trillion merger of the two biggest cable providers.
The deal, announced Wednesday by TWC Chairman and CEO Michael Powell, includes a $300 million cash infusion, according to a regulatory filing.
The company is also expected to make $500 million in new investments, including $200 million to build a new TV service.
Comcast is the largest cable operator in the U.S., with about 50% of the market.
Powell said Comcast had reached a deal with a private equity firm, TPG Capital, to buy TWC for $4 billion in cash.
“This merger will enable us to build on our current assets and accelerate our transformation to become the leading provider of broadband and TV service,” Powell said in a statement.
“We are delighted to welcome TPG into our team, and look forward to working together with them to accelerate our vision of bringing the best of TV to every home and business.”
TPG’s purchase of Comcast includes a new bundle of cable TV channels, including the HBO Go service, as well as access to Comcast’s NBCUniversal and Hulu.
Powell’s announcement came after he said TWC would not get a deal to acquire NBCUniversal’s stake in NBCUniversal Studios and Hulu, which Comcast said it was negotiating with a potential buyer.
The merger is expected to close by the end of 2019.
Powell noted that Comcast’s current cable network included only about 20% of Comcast customers, but that TWC was offering 30% of its customers.
He said the combined company would have a “super-fast” broadband network.
TWC said in its filing that the deal is expected a “significant positive impact on the network.”
“This transaction is an important step in achieving our goals of expanding our network and delivering a competitive, differentiated offering,” Powell wrote in a filing.
TWA’s $3.8 billion acquisition of Time Warner Cable in 2019 boosted the cable company’s market share to more than 50% from 30% in 2017.
Comcast said in December that it plans to pay $50 billion to acquire TWC in a deal valued at $3 billion, a record deal for a cable operator.
TW Cable said in February that it had agreed to pay Comcast $5 billion to purchase TWC.
Powell called the deal a “transformative transaction” for TWC that would help the company “strengthen its position in the cable and broadband markets.”
TWC’s acquisition of NBCUniversal, which has more than 500 employees, also is a record for the company, which also includes NBCUniversal TV and Universal Studios.
Comcast will retain most of its NBCUniversal properties, including Universal Studios, Universal Studios Hollywood and Universal Pictures’ television division.
TWCom said it would invest $1,000 million in TWCom’s U.K. operations and $200,000 in TWC operations in the United States, where TWC is based.
Comcast had previously announced a $1 million payment to help TWCom with its merger with TWCom, which was originally planned for 2017.
The purchase includes TWC Cable’s new cable and Internet businesses, which include a broadband network in the Atlanta market and plans to expand to other cities.
TWComm is expected be one of the top five cable providers in the country by 2020, according a recent report from MoffettNathanson, a research firm.