Charter Communications has acquired Time Warner Cable in a deal worth $78.7 billion to take on the country's largest cable operator, Comcast Corp.
The deal will see the two companies -- which are the second and third largest cable operators in the U.S. -- merge in a new company called New Charter. The new company will be one of the largest pay TV and broadband operators in the U.S.
Charter is paying $55.3 billion in cash and stock, and the rest of the price comes through Charter taking on some of Time Warner Cable's debt.
As part of the agreement, Charter will also buy Bright House Networks for more than $10 billion.
The deal announcement confirmed Monday's report from Bloomberg News that the two companies were merging.
Charter's bid, which was widely expected, comes about one month after Comcast withdrew its bid for TWC due to regulatory concerns. Charter was an original bidder for Time Warner Cable last year, until Comcast swooped in with its offer. Competition is heating up among cable and satellite providers as AT&T is making a bid for DirecTV.
Tom Rutledge, the current President and CEO of Charter Communications, will serve as President and CEO of New Charter.
"With our larger reach, we will be able to accelerate the deployment of faster Internet speeds, state-of-the-art video experiences, and fully–featured voice products, at highly competitive prices," said Rutledge in a statement.
Shares of Charter Communications Inc. were up more than 3% in premarket trading, but then rapidly fell to around $174 after the market opened.
Additional reporting by Associated Press