Time Warner Cable Inc. said Monday it will pay $3 billion in cash for cable operator Insight Communications Co. Inc., which has more than 750,000 customers in Indiana, Kentucky and Ohio.
News of the definitive agreement heightened the market's focus on merger and acquisition activity, already in focus with Google Inc.'s $12.5 billion cash purchase of Motorola Mobility. The deals helped lift the stock market as well as precious metals, which normally move in the opposite direction of equities, with the S&P 500 gaining 13.49 to 1,149.63.
Time Warner Cable is buying Insight from The Carlyle Group, Crestview Partners, MidOcean Partners, members of Insight management and others.
Carlyle and Insight management took the company private in December 2005, and Crestview and MidOcean purchased a significant stake in the company in April 2010.
Time Warner Cable said that after incurring onetime costs and capital expenditures, the deal will create annual cost efficiencies of about $100 million through programming expense savings and other cost reductions. The company expects to realize the bulk of the savings within two years of closing.
Time Warner Cable shares were up 31 cents to $30.22 in midday trading.