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TIME WARNER EXPANDS CABLE SYSTEMS IN JOINT VENTURE
Published September 13, 1994
Time Warner, the nation's second-largest cable company, said yesterday that it would merge some of its extensive cable systems with those owned by Newhouse Broadcasting cable systems, which serves 1.4B subscribers. In a separate deal, Time Warner will pay $375M in stock to Summitt Communications to acquire a cable system in Winston-Salem, NC, and two in suburban Atlanta. Both transactions, which Time Warner accomplished without spending any cash, will increase Time Warner's customer base to 8.9M. Though a value wasn't put on the Newhouse transaction, market analysts estimate the total value at $8.4B (Mark Robichaux, WALL STREET JOURNAL, 9/13). Under the deal, Time Warner will "thoroughly dominate" markets in Charlotte, NC, upstate NY and Orlando, FL (Paul Farhi, WASHINGTON POST, 9/13). BEEFING UP FOR A FIGHT?: In New York, Geraldine Fabrikant writes that the venture is a "way to survive the consolidation sweeping the industry as even the biggest players brace for expected competition from the regional telephone companies" (N.Y. TIMES, 9/13). Time Warner Chair Gerald Levin contended the deal will improve "growth prospects" not only for cable business and advertising sales, but also telephone and "future interactive services" (James Bates, L.A. TIMES, 9/13). Newhouse President Robert Miron: "To be prepared for the future, I need three things: the size of these geographic clusters, technological expertise and a sound financial partner. We got all three in Time Warner" (WASHINGTON POST, 9/13).