NEW YORK (AP) — There’s a new player in the U.S. cable dating game.
European cable and mobile phone operator Altice, controlled by founder Patrick Drahi, is fixing its lens on the U.S. market starting with a $9.1 billion deal for St. Louis-based Suddenlink.
Altice, which has grown through a series of acquisitions over the past dozen years, says it envisions the business as half in Europe, half in the U.S.
A wave of consolidation has swept the cable and satellite TV industry as U.S. viewers increasingly turn to the Internet for their TV fix. At the same time, the companies’ costs for the channels have grown.
Suddenlink is the 7th largest cable operator in the U.S., with 1.5 million residential customers in smaller markets in the South, Midwest and West. Like other smaller cable companies, it is having a harder time in the pay-TV market. Such companies say their costs, per subscriber, are higher than those of cable giants such as Comcast.
Comcast’s own $45 billion quest for No. 2 rival Time Warner Cable was recently quashed by regulators wary of the bigger company’s potential power to undermine competition from online video providers. That bid’s failure has set off expectations that Charter Communications, backed by cable magnate John Malone, will try to buy Time Warner Cable. Charter is also pursuing Bright House, a cable company with operations focused in Florida. Meanwhile, AT&T is waiting for regulators to clear its $48.5 billion purchase of satellite TV provider DirecTV.
Luxembourg-based Altice SA said Wednesday it will buy 70 percent of Suddenlink Communications with a combined offer of cash and assumed debt from existing owners BC Partners and CPP Investment Board, and company management.
Altice 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.
Altice plans to expand further into the U.S., CEO Dexter Goei said in a conference call with analysts Wednesday.
“The backing of Altice will better position the company to gain critical scale as a major consolidator in the U.S. cable industry,” said Suddenlink CEO Jerry Kent in a statement.
Suddenlink serves cable subscribers in 16 states, including Arizona, Arkansas, California, Idaho, Kansas, Kentucky, Louisiana, Mississippi, Missouri, New Mexico, North Carolina, Ohio, Oklahoma, Texas, Virginia and West Virginia.
It generated revenue of $2.3 billion in revenue last year.
Altice had a loss of 552 million euros ($614 million) last year on revenue of 3.9 billion euros. It makes 85 percent of its revenue in France, where it owns Numericable-SFR, which has 23 million mobile subscribers and 6.6 million residential broadband customers.
Altice said it expects the deal to be completed by the end of the year.
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Joseph Pisani contributed from New York and Greg Keller from Paris.
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