$17B for Cablevision: Altice Cablevision

Published: September 18, 2015

$17B for Cablevision: Altice Cablevision, With its $17.7 billion takeover of Cablevision, the European company Altice solidified its position as a bold new player in the fast-consolidating American cable market. And its executives promised on Thursday that this was just the beginning of the company’s empire building in the United States, noting the potential to acquire other cable companies and even mobile networks.

Yet Altice’s track record of aggressively cutting costs to increase profitability in the companies it acquires raised immediate concerns among consumer advocates, who say that this cost-cutting model has not always resulted in happy customers when the company’s execution does not live up to its ambitions.

Analysts expected Altice to deploy a similar strategy at Cablevision, citing the deal’s lofty price tag – roughly $10 billion in cash and the assumption of $7.7 billion in debt – as well as weaknesses in Cablevision’s business and perhaps overly optimistic expectations of nearly $900 million in savings.

No matter how it proceeds, Altice is entering the market with swagger.

“There’s a new sheriff in town, and we’re probably going to run it a little differently,” Dexter Goei, Altice’s chief executive, said in an investor conference in New York on Thursday.

Altice, which is based in Amsterdam, made its first foray into American cable in May when it agreed to buy Suddenlink Communications, a cable operator based in St. Louis, for $9.1 billion.

If Altice’s deal for Cablevision is approved, its expanded American operations would rank among the largest cable operators in the United States, with about 3.7 million video subscribers, behind Comcast, Time Warner Cable, Charter Communications and Cox Communications.

“Six months ago, we were number nonexistent, so this is moving fast,” Patrick Drahi, 52, the French-Israeli billionaire who founded and controls Altice, said in the investor meeting.

The deal is likely to draw significant concern from United States regulators, particularly as the number of companies in the broadband and cable television markets shrinks.


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