News

Europe's Altice extends aggressive U.S. expansion with deal for Cablevision

NEW YORK, N.Y. – European telecommunications and cable company Altice has agreed to buy New York cable operator Cablevision for US$17.7 billion, including debt.

It’s the second major U.S. acquisition announced this year by Altice, which is poised to become the fourth-largest cable system operator in the United States once the Cablevision deal closes.

Only $3.3 billion of the transaction is to be paid in cash from Altice, with the rest from cash at Cablevision and $14.5 billion of new and existing debt at Cablevision.

Altice said Canada Pension Plan Investment Board and BC Partners have an option to acquire up to 30 per cent of the equity of Cablevision but didn’t announce details.

The European company made its first move into the United States buy purchasing a 70 per cent stake of St. Louis-based Suddenlink from CPP Investment Board and BC Partners, which retained a minority stake in Suddenlink’s parent company.

Cablevision said Thursday that the family-controlled company considered that “the time is right for new ownership of Cablevision.”

The move is part of Altice’s aggressive expansion in the United States. Altice’s CEO Dexter Goei has said that the company is aiming for half of its portfolio to be U.S. business.

Altice said it hopes to complete the Cablevision deal in the first half of next year, though it remains subject to regulatory approval.

U.S. cable companies have been in a merger frenzy over the past few years as people increasingly drop their TV packages and watch video online from competitors like Netflix, while cable companies’ costs for sports and other channels rise.

Charter Communications, backed by cable pioneer John Malone, is trying to buy Time Warner Cable and Bright House for $67.1 billion. That comes after Comcast walked away from a combination with Time Warner Cable because of regulatory pushback. AT&T recently closed on a $48.5 billion purchase of satellite TV company DirecTV.

Altice SA, controlled by founder Patrick Drahi, has expanded from a small regional Internet and cable provider in France’s Alsace region to making an $18.5 billion acquisition last year of France’s No. 2 mobile phone operator, SFR. Earlier this year, Altice bought Portugal Telecom for $8.4 billion. It also has operations in Belgium, Switzerland, Israel and elsewhere.

— with a file from The Canadian Press in Toronto.