The Objective of this case was to lead the merging of the Charter Communications and the Times Warner Cable to a positive result or outcome. As the Merging of these two companies would be a major threat to their bitter rivals, Comcast Corporation, who are at the top in the Cable Communications Industry. The larger company could achieve better economies of scale and pose a major threat to the Comcast Corporation.

1. “A Case Study on Time Warner and Charter Communications Merger”
By
Khalil, Maybin, Monalisha, Samreen, Sanyukta
Under the Guidance of
Dr. Sangeetha Vinod
In (Partial) Fulfilment of the Requirements for the Degree of
Bachelors of Business Administration
SCHOOL OF BUSINES
MANIPAL UNIVERSITY DUBAI
December, 2015

2. Executive Summary
The case is taken into consideration following the merging of Charter Communications with
the Time Warner Cable. This merging will merge the fourth largest cable company with the
second largest cable company respectively.
The Objective of this case was to lead the merging of the Charter Communications and the
Time Warner Cable to a positive result or outcome. As the Merging of these two companies
would be a major threat to their bitter rivals, Comcast Corporation, who are at the top in the
Cable Communications Industry. The larger company could achieve better economies of scale
and pose a major threat to the Comcast Corporation.
By May 2015, Charter Communications acquired a deal of $78.7 billion to merge with the
Time Warner Cable i.e. to acquire TWC for $195 a share and also confirmed a separate deal
with the Bright House Networks for $10.1 billion. With Time Warner and Bright House,
Charter Communication could have to 23 million customers.
Although the deal is subject to regulatory Approval, it is expected to face less resistance from
the Federal Communication Commission than with merging of the Comcast/TWC deal, as the
companies are relatively smaller and their media holdings are not as extensive as those of
Comcast.

3. Introduction
Introduction of Time Warner Cable: - In the late 1940s, entrepreneurs using simple
antennas and Army-surplus coaxial cable created the country’s first cable television systems
and revolutionized the way Americans watched TV. More than 70 years later, Time Warner
Cable (TWC), the second largest cable provider, owns and manages advanced, well-clustered
cable systems throughout the United States. Time Warner Cable offers cutting edge digital
technology, a rich range of home entertainment and information choices for the whole family
to enjoy, and superior service.
Time Warner Cable has a long history of leadership within our industry and has led the way in
technical innovation through the use of fibre optics to improve and expand our cable products
and services.
 1968: American Television and Communications (ATC) is founded, planting the roots of
today’s TWC.
 1973: Time Inc. acquires 9% of ATC (and, five years later, agreed to acquire 100% of the
company); Warner Communications forms Warner Cable.
 1989: Merger of Time Inc. and Warner Cable announced, later to become Time Warner Inc.
 1992: ATC and Warner Cable become Time Warner Cable; NY1 News is launched in New
York City.
 1996: Road Runner the first cable-delivered high speed Internet service, is launched.
 1999: Digital cable and Video On Demand launched.
 2003: Digital phone service launched.
 2005: Triple Play offering is rolled out.
 2006: TWC gains additional systems and employees with Adelphia acquisition.
 2007: TWC becomes a public company.
 2009: TWC separates from Time Warner Inc.
 2011: TWC acquires New Wave Communications cable systems and business services
subsidiary Navi Site to enable “cloud” services.
 2012: TWC acquires Insight Communications.
 2013: After 41 years in the cable industry, TWC Chairman and CEO Glenn Britt announces
he will retire from the company at the end of the year. The Time Warner Cable Board of

4. Directors elects Robert D. Marcus, the company’s President and Chief Operating Officer, to
succeed Mr. Britt as Chairman and CEO, effective January 1, 2014.
 2013: TWC acquires Duke Net Communications.
 2015: TWC enters into merger agreement with Charter Communications, Inc., which also
agreed to combine with Bright House Networks.
 Time Warner Cable Inc. is among the largest providers of video, high-speed data and voice
services in the United States, connecting 16 million customers to entertainment, information
and each other. Time Warner Cable Business Class offers data, video and voice services to
businesses of all sizes, cell tower backhaul services to wireless carriers and enterprise-class,
cloud-enabled hosting, managed applications and services. Time Warner Cable Media, the
advertising sales arm of Time Warner Cable, offers national, regional and local companies
innovative advertising solutions.
 Time Warner Cable serves customers in the following 29 states: Alabama, Arizona,
California, Colorado, Hawaii, Idaho, Illinois, Indiana, Kansas, Kentucky, Maine,
Massachusetts, Michigan, Missouri, Nebraska, New Hampshire, New Jersey, New Mexico,
New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas,
Virginia, Washington.
 Time Warner Cable employs more than 50,000 people across the U.S.
 Time Warner Cable owns and provides customers with exclusive, local, all-news TV
channels in New York, North Carolina and Texas that give viewers content targeted to their
community interests and concerns.
Introduction of charter communication: At the end of 1999 Charter Communications, Inc.
operated cable systems with 6.2 million subscribers, making it the fourth largest multi-system
operator (MSO) in the United States behind Time Warner Inc. and Comcast Corp. The
company was founded in 1993 and grew through a series of acquisitions. In 1998 it was
purchased for $4.5 billion by Microsoft cofounder Paul Allen, who merged it with Marcus
Cable which he had previously acquired. With Allen providing much of the funding, Charter
went on an aggressive acquisition drive in 1998 and 1999. The company made eleven major
acquisitions in 1999, culminating in an initial public offering (IPO) in November that raised
approximately $3.5 billion. Charter Communications Inc. is a provider of cable services in the
United States, offering a variety of entertainment, information and communications solutions
to residential and commercial customers. The Company sells its video, Internet and voice
services primarily on a subscription basis, often in a bundle of two or more services.

5. The Company provides broadband communications solutions to business and carrier
organizations, such as video entertainment services, Internet access, business telephone
services, data networking and fibre connectivity to cellular towers and office buildings.
Through its hybrid fibre and coaxial cable network, the Company offers its customers
traditional cable video services, as well as advanced video services, Internet services and voice
services.
1993: Charter Communications, Inc. is formed by three former executives of Cencom Cable
Associates, Inc. in St. Louis, Missouri.
1994: Begins acquiring cable television systems.
1997: Reaches one million subscribers.
1998: Charter is acquired by cofounder, Paul Allen, for $4.5 billion.
1999: Charter goes public in November after making more than ten major acquisitions in one
year.
Acquisition of Time Warner Cable and Bright House: Charter Communications interested
in buying its larger rival Time Warner Cable. After three attempts to buy and merge with the
company, Charter's chief executive officer Thomas Rutledge wrote in an open letter to Time
Warner Cable's chief executive officer Robert Marcus. The $132.50 per share offer, just above
TWC's closing price at $132.40 on January 13, was rejected. On February 13, 2014, Time
Warner Cable accepted an offer of $158.82 per share from Comcast avoiding a hostile
takeover situation from Charter. On April 28, 2014, Comcast and Charter announced that,
assuming Comcast's merger with Time Warner was successful, Charter would acquire 1.4
million Comcast/Time Warner Cable customers, bringing Charter's subscriber total to 29
million and making Charter, by its own count, the second-largest cable operator in the country.
On May 26, 2015, Charter and Time Warner Cable announced that they have entered into a
definitive agreement for Charter to merge with Time Warner Cable in a deal valued at $78.7
billion. Charter also confirmed that it would continue with its proposed acquisition of Bright
House Networks under slightly modified terms.

6. Stakeholders perspective
Shareholders:
Charter Communications & Time Warner Cable announced on Tuesday that they will be
entering into a definitive agreement in which Time Warner Cable will be merging with
Charter. Charter which is a leading internet communications provider and the fourth-largest
cable operator in the U.S. As per News and media coverage into this matter they announced
that shareholders of Time Warner Cable will receive $195.71 per share, which represents a
staggering 14% premium to the stocks closing price as of May 22nd. Charter
communications will be providing $100 in cash and the rest in shares of a new public parent
company, called “New Charter”, for every single TWC share which is outstanding.The TWC-
Charter deal puts TWC’s enterprise value at $78.7 billion. Charter had earlier agreed to buy
Bright House Networks and this Syracuse based company will also be a part of New Charter.
Customers:
The Main objective keep in mind while a merger takes place is not to hamper the customers
experience. And in many cases is to improve overall customer experience.
The same can be said about the time warner cable and charter communications merger.
both companies are doing their best to keep their customer experience the best they can.
The companies have decided to join forces by creating better packages combining both the
company’s powers together including new and faster fiber optic technology to connect their
customers with better accessibility.
New Charter's plans for expanding Wi-Fi hotspots, and for boosting Time Warner Cable and
Bright House baseline broadband speeds.
Employees:
While mergers are good for the companies to combine forces to increase profitability, the
same cannot be said in the case of the employees. In the case of Time Warner Cable and
Charter Communications there might be some requisites of employees being laid off leaving
the employees worried about their positions or the changing culture of the company. And
considering the bad reputation of time warner cable and in some cases for charter, looking for
jobs in case of firing would be difficult having either of their names associated with the
employee.

7. Connection to Empirical Research
1. AT&T merges with Alltel
AT&T had got approval from the Federal Communications Commission to merge with
Alltel. AT&T proposed a deal of $780 million to purchase the Alltel. AT&T is an
American multinational telecommunications corporation headquartered at Whitecare
Tower in downtown Dallas, Texas. They are the second largest provider of mobile
telecommunications and the largest provider of fixed telephone in the U.S and also
provide broadband subscription television services, whereas Alltel was a wireless
service provider, primarily based in the U.S.
2. Verizon merges with AOL
Like the other two companies mentioned above, Verizon merges with AOL for $50 per
share – an estimated total value of approximately $4.4 billion. AOL’s key assets include
its subscription, its portfolio of global content brands including the Huffington Post.
"We did start out with a number of discussions around a joint venture, but we quickly saw there
was a vision that we both believed in where we could be the No. 1 global media technology
company, and if we put our assets together, we thought we could make something very, very
big out of this," Marni Walden, Verizon's president of product innovation and new businesses,
told CNBC's "Squawk on the Street".

8. SWOT Analysis
Time Warner Cable
Strengths
 High Product offering which is also
personalized
 Strong brand recognition
 Good financial health as compared to
competition
 No extra HD equipment and no
service contracts required
 Equipment doesn’t have to be bought
 Dominant market share
 Its presence even reaches into the
contemporary cartoon genre such as
the Cartoon Network
Weakness
 Inability to market to consumers
using mass media
 Signal intrusion & accidental
transmission of wrong content is
possible
Opportunity
 Awareness of bundling and awareness
of Internet phone service
 Availability of HD Channels
 Increased buying power of Hispanic
Market
 Consumer confidence by providing
exceptional customer service
 Internet marketing
Threats
 Satellite perception by potential
customers
 Competitor pricing and partnerships
of competition (e.g. Cablevision
Systems Corporation, Comcast
Corporation)
 Cell phone usage increased thus
decreased need for landline service
 Entrance of telecom into
television/video content market

9. Charter Communications
Strengths
 The company merged with Bright
House Networks for $10.5 billion
which further strengthened their
position in the market.
 They have a wide coverage of
networks from California to Georgia.
Weaknesses
 The company went bankrupt in 2009
and is yet to make a full comeback.
 The client base often complains of
poor services and opaque costs.
Opportunities
 After bankruptcy, the company was
able to made a comeback in the stock
market in 2010.
 With the new merging with Time
Warner Cable, the company will be
able to further gain more subscribers
in states they previously weren’t in
like New York.
Threats
 The growing younger population
prefers Netflix, Hulu and other
online streaming services over
traditional cable television.
 The company aims to continue
growing through mergers and it will
lead to more regulations and
legislations.

10. Time Warner Cable and Charter Communications merger
Strengths
 With the merger, Charter
Communications can further expand
to big states like New York and
Washington thus being able to reach
more customers.
 With a combined force, both
companies would be able to improve
upon different aspects of their
service.
Weaknesses
 A lot of customers have issues with
both companies therefore making
Time/Charter lose potential
customers.
 Both companies will lose their
complete ownership of their
respective companies to the other.
Opportunities
 Combination of resources from both
Time Warner Cable and Charter
Communications will help provide
better quality of service to its
customers.
 If they merge, they become one of
the largest cable TV and broadband
internet providers in existence.
Threats
 Shareholders haven’t agreed to the
merger so it poses the chance of the
deal not going through because Time
Warner previously lost a lot of
money in a deal of a similar nature
(with AOL for $186.2 billion)
 Federal government is investigating
Charter’s deal with both Time
Warner Cable and Bright House
slowing down the merger.

11. Alternatives
Alternative 1 -:
Get the shareholders of both companies to agree to the Time Warner Cable and Charter
Communications merger.
Advantages Disadvantages
If the merger goes through, it increase the
company’s value.
As all businesses, risk factors are involved
when going into a merger which would mean
that this business could also have a potential
downfall
Shareholders gain profit if the deal goes
through.
Shareholders lose a lot of money if the deal
backfires.
Share value appreciation if merger goes
through because the company will become the
largest cable TV and broadband company in
existence.
Brand image can be ruined since some
customers wouldn’t want to support the
merger.
Alternative 2-:
Withhold the merger for a while longer to enforce the issues that each of the companies are
facing.
Advantages Disadvantages
In the future if the merger happens, each
company won’t have any issues to resolve
between each other when they decide to take
up future ventures.
It will cost an unspecified amount for both
Time Warner Cable and Charter
Communications to resolve any of their issues
they are currently facing.
It would strengthen the relationship of trust
between the two companies.
If any one of the companies’ does not resolve
an issues and the issue comes up after the
merger has taken place, it could damage the
relationship between Time Warner Cable and
Charter Communications.

12. Conclusion
Keeping in mind the alternatives previously stated, we have decided to choose alternative 1.
The major reason as to why the shareholders are taking time to agree to this merger can be the
fact that Time Warner had previously closed a merger deal in 2000 with AOL for $ 182 billion
in stock as well as in debt. This merger went horribly bad with the stocks dipping sharply
resulting in loss of employment within the company.
The merger with AOL was to create “create unprecedented and instantaneous access to every
form of media and to unleash immense possibilities for economic growth, human
understanding and creative expression.” In May of the same year the dot com bubble burst
which meant the growth they the merger aimed to achieve slowed down. The online advertising
plan slowed down. The world no longer required the faster dial-up services that AOL wanted
to provide.
Taking all of this into consideration, the fears of the shareholders are justified. But as a
company both Timer Warner and Charter Communications can try and provide incentives to
their shareholders to encourage them to agree to this merger.
The companies can give an outline of the financial plan for the future operations to the
stakeholders; this may help them gain their trust. As previously stated, the share value of the
merged company is set to rise once, so it will be beneficial for the shareholders to invest now.
Furthermore, the shareholder’s share in the profit will also increase so once the merger goes
through, the companies are set make profits. Therefore, its overall a win-win situation for the
shareholders and they should let the merger go through.

13. References
 https://www.benton.org/initiatives/mergers_acquisitions DOR: 22/12/215
 Tom DiChristopher(2015),” Verizon Merges with AOL”
http://www.cnbc.com/2015/06/23/verizon-closes-aol-acquisition.html DOR:
22/12/2015
 Kate Cox, 2015, Charter/Time Warner Cable Merger Plan Great For Everyone,
According To Charter, http://consumerist.com/2015/11/03/chartertime-warner-cable-
merger-plan-great-for-everyone-according-to-charter/
 Tim Arango, 2010, How the AOL-Time Warner Merger Went So Wrong,
http://www.nytimes.com/2010/01/11/business/media/11merger.html
 Tom Johnson, 2000, That’s AOL Folks,
http://money.cnn.com/2000/01/10/deals/aol_warner/
 Alfred Rappaport, 2006, Ten Ways To Create Shareholder Value,
https://hbr.org/2006/09/ten-ways-to-create-shareholder-value/ar/1