Altice to Buy Cablevision for $10 Billion – Wall Street Journal

Updated Sept. 17, 2015 4:22 a.m. ET

PARIS—European cable company Altice SA ATC 0.41 % on Thursday said it would buy Cablevision Systems Corp. CVC 0.00 % for about $ 10 billion, a deal that will create the number four cable operator in the U.S. market.

Altice will pay $ 34.90 a share for Cablevision, which serves 3.1 million customers across its TV, voice and high-speed data services throughout the New York metropolitan area. Including Cablevision's debt the deal has an enterprise value of $ 17.7 billion.

For Altice, which is run by billionaire investor Patrick Drahi, based in Amsterdam and has operations from France to Israel, the transaction is the latest in a raft of deals that has seen it become a prolific consolidator on both sides of the Atlantic.

After completing a series of deals in Europe the company in May opened a new frontier in the U.S. by inking a $ 9 billion deal to buy cable company Suddenlink Communications.

In Europe, Mr. Drahi's Altice has been able to cut costs by bundling four products: TV, high-speed Internet and fixed- and mobile-phone services. That so-called quadruple-play model doesn't yet exist on a large scale in the U.S.

"My vision is to do the same in the U.S., but bigger," Mr. Drahi said in an interview with The Wall Street Journal over the summer.

Cablevision, the fifth-largest U.S. cable company and eighth-largest provider of pay-TV services, has been widely seen as a potential acquisition target in a fast-consolidating industry where a few heavyweights are in dominant positions. AT&T Inc. T 0.24 % became the No. 1 pay-TV provider when it closed its purchase of DirecTV in July. Comcast Corp. CMCSA 1.06 % is the largest broadband provider, and Charter will leap to the top ranks if regulators approve its proposed takeover of TWC.

Bethpage, N.Y.-based Cablevision generated $ 6.5 billion in revenue in 2014, with net income of $ 311 million, and like other cable operators has been gradually shedding video consumers as they "cut the cord."

The company is controlled by the Dolan family, who have a 72.3% voting stake according to the company's proxy filing. The family also owns cable-network company AMC Networks Inc. AMCX -0.01 % and Madison Square Garden Co. MSG 0.17 % , which aren't part of the Altice deal.

For Altice, securing Cablevision's footprint in New York would be a major step toward its goal of becoming a big player in the media-and-telecommunications business in the U.S. But there are plenty of challenges too. For one, Cablevision has a high penetration of its territory, leaving limited room for growth, and it faces a stiff regional competitor in Verizon Communications Inc. VZ -0.39 % 's FiOS offering.

—Dana Mattioli, Ryan Knutson and Shalini Ramachandran contributed to this article.

Write to William Horobin at William.Horobin@wsj.com

Corrections & Amplifications:
Altice said it would buy Cablevision for about $ 10 billion. An earlier version of this article incorrectly said it would pay about $ 7.7 billion. Altice is based in Amsterdam. An earlier version of this article incorrectly said the company is based in Luxembourg. (Sept. 17)