8-KMaterial AgreementsOther EventsExhibits & Filings

COMCAST CORP 8-K Report, Material Agreement (Apr 28, 2014)

Filed April 28, 2014For Securities:CMCSACCZ

Summary

Comcast Corporation (CMCSA) filed an 8-K on April 28, 2014, detailing a material definitive agreement with Charter Communications, Inc. This agreement outlines a series of complex transactions, including a contribution and spin-off, an asset exchange, and an asset purchase, all designed to occur in conjunction with Comcast's previously announced merger with Time Warner Cable Inc. (TWC). The core of these transactions involves Comcast divesting approximately 3.9 million net subscribers from the combined Comcast-TWC entity to Charter. This strategic move is intended to streamline operations and potentially satisfy regulatory requirements related to the TWC acquisition. The transactions involve the creation of a new entity, SpinCo, which will hold a portion of Comcast's existing systems and subscribers. This SpinCo will then be spun off to Comcast shareholders or potentially offered in an exchange. Charter will acquire a significant portion of these divested assets, including systems from TWC, through various acquisition and exchange mechanisms. The agreement also includes a voting agreement with Liberty Media Corporation regarding Charter shares, ensuring support for the transactions, and a consent from TWC to these arrangements.

Key Highlights

  • 1Comcast entered into a definitive agreement with Charter Communications for three major transactions: a contribution/spin-off, an asset exchange, and an asset purchase.
  • 2These transactions are contingent upon and will occur concurrently with Comcast's merger with Time Warner Cable (TWC).
  • 3The net result is the divestiture of approximately 3.9 million subscribers from the combined Comcast-TWC entity to Charter.
  • 4A new entity, SpinCo, will be created by Comcast to hold a portion of its systems, which will then be spun off or split off to Comcast shareholders.
  • 5Charter will acquire various assets from TWC and Comcast, including systems serving approximately 1.4 million subscribers for cash and an exchange of certain systems serving 1.6 million subscribers each.
  • 6A voting agreement with Liberty Media Corporation, a Charter shareholder, has been executed to secure support for the transactions.
  • 7TWC has provided its consent to Comcast entering into these transactions with Charter, as outlined in a separate consent agreement.

Frequently Asked Questions

The primary purpose is to facilitate the divestiture of approximately 3.9 million net subscribers from the combined Comcast-TWC entity to Charter, which is a key step expected to occur alongside Comcast's acquisition of Time Warner Cable (TWC).

The divestiture is structured through three main components: a contribution and spin-off of a new entity (SpinCo) by Comcast, an asset exchange between Comcast and Charter, and a direct asset purchase by Charter from Comcast (for TWC assets).

Liberty Media Corporation, a significant shareholder in Charter, has entered into a voting agreement to vote its Charter shares in favor of the transactions and against any actions that would impede them, ensuring support for the deal.

Yes, the transactions with Charter are designed to be executed substantially contemporaneously with the completion of Comcast's merger with Time Warner Cable, and their consummation is a closing condition for the Charter transactions.