Altice’s proposed US$17.7bn acquisition of the US operator Cablevision Systems poses no threat to competition, would afford the target benefits of scale, and reduce vertical integration, the companies said in a transfer application filed with the FCC. As such, they have called for a quick review.
Altice’s (AMS:ATC) proposed US$17.7bn acquisition of the US operator Cablevision Systems (NYSE:CVC) poses no threat to competition, would afford the target benefits of scale, and reduce vertical integration, the companies said in a transfer application filed with the FCC.
Asking the FCC to approve the deal, the European telecoms group and its intended target argued that it poses “no anticompetitive issues of vertical or horizontal consolidation in the domestic cable or broadband market”.
They added that Cablevision’s regional cable network, which covers about 3.1 million customers, is “in the most competitive cable market in the country”.
As such, they called for an prompt review so the deal can close by 30 June 2016.
Patrick Drahi’s (pictured) Altice agreed to buy Cablevision, the leading operator in the New York metropolitan area, in mid-September, just a few months after inking a deal to buy a 70% stake in Suddenlink. Both deals are subject to regulatory approvals.
Together, Cablevision and Suddenlink would create the US’s fourth largest cableco with 4.6 million customers across 20 states.
Altice and Cablevision said the deal would improve the latter’s ability to compete by allowing it to take advantage of Altice’s international expertise and financial and technical resources. This will lead to better services and value for Cablevision customers, they added.
They also stressed the potential benefits of scale to Cablevision, saying its customers would benefit from innovation that would be “less accessible” otherwise.
As Altice is not aiming to acquire any interest in MSG Networks and AMC Networks, they argued that the deal reduces vertical integration in the cable TV market by eliminating common control over the two networks.
Announcing the deal in September, Altice said its partners in Suddenlink – BC Partners and CPP Investment Board – will have the option to acquire up to a 30% stake in Cablevision.
Altice’s financial advisors on the Cablevision buy were JP Morgan, BNP Paribas and Barclays. Its legal advisors were Shearman & Sterling, Covington & Burling, Mayer Brown, Ropes & Gray, De Brauw Blackstone Westbroek and Morris Nichols Arsht & Tunnell.
To help fund the deal, Altice recently raised €1.61bn (US$1.8bn) in a capital raise and priced US$8.6bn of new debt. The company sought to clarify its capital structure in a statement early this month following concerns about the amount of leverage required to fund these and earlier purchases.
