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Altice to Purchase Cablevision for $17.7 Billion

AlticeAltice, a European cable and telecommunications company, will purchase Cablevision, a cable operator based in New York for $17.7 billion, which includes debt. Altice is currently in the process of expanding into the US market.

The deal was officially announced on Thursday. Cablevision says that it is high time the company, which is controlled by a family, gets hold of a new owner.

The acquisition is part of the plan of Altice, which is based in the Netherlands, to expand into the US. In May, the company purchased Suddenlink, a St. Louis based cable company, for $9.1 billion. Previously, it had attempted to acquire Time Warner Cable.

Cablevision shares have increased by 15.1% or $4.52 to $32.86. Its debt of $14.5 billion will finance this deal, which Altice hopes to conclude in the first half of 2016. However, the deal first needs to get the approval of regulators.

Cable companies across the US have been scrambling to sign merger deals during the last few years as consumers have been giving up television packages in favor of viewing online video content from Netflix. To make matters worse, cable companies have to bear extra costs for various channels.

Currently, Charter Communication, under the leadership of John Malone, is making attempts to purchase Bright House and Time Warner Cable for $67.1 billion. Comcast had made similar attempts, but couldn’t get the required regulatory approval. Recently, At&T purchased DirecTV, a satellite television company, for $48.5 billion.

Patrick Drahi, the French billionaire who founded Altice SA, is known for his aggressive style of acquiring businesses and expanding them. Speaking at an investor conference held by Goldman Sachs in New York, Drahi said that overhead costs can be improved at Cablevision, complaining that the company pays too high salaries. He said that he is aiming at bringing

the US average revenue per user to Europe and Europe’s cost structure to the US.

In the mid nineties, Drahi established regional cable television operators throughout France and sold them to huge US corporations. He then helped these corporations to acquire smaller European rivals.

In 2002, he founded Altice. Under his able guidance, Altice evolved from a small cable and Internet provider in Alsace to a company capable of acquiring SFR, the second biggest mobile phone operator in France, for $18.5 billion. Early in 2015, the company spent $8.4 billion in purchasing Portugal Telecom and the US-based Suddenlink.

Altice has offices in Israel, Switzerland, Belgium, and other countries.