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article imageCharter is going to buy rival cable provider for $10.4 billion

By Owen Weldon     Apr 1, 2015 in Business
Earlier this week, it was announced that Charter Communications would be purchasing its competitors, Bright House Networks, for more than $10 billion in cash and stock.
The announcement comes just as Comcast is continuing to try and complete the purchase of Time Warner Cable. When Charter and Bright House merge, it will become the second biggest cable operate by customer value, says Charter.
Thomas M. Rutledge, Charter's chief executive, said that Bright House Networks provides Charter with strategic flexibility, as well as important financial, operating and tax benefits. He continued to say that Bright House has built outstanding cable systems in markets that complete or are contiguous with Charter's footprint.
On Tuesday, Charter's shares rose to a record high of $199. When the deal is completed, it will help Charter expand in Florida, where Bright House has a strong presence. California, Alabama, Michigan and Georgia are key markets for Charter.
Charter could end up closing the gap with Comcast by acquiring other companies. Some analysts have said potential targets for Charter include CableOne, Mediacom and Suddenlink.
Jeff Wlodarczak, an analyst with the Pivotal Research Group, said that he thinks it is inevitable that the rest of the cable industry that isn't owned by Comcast will be sold to Charter.
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