Institutional Investors Await Comcast-Time Warner Cable DOJ Outcome

Institutional investors are carefully watching for a signal from regulators and antitrust officials regarding the possible merger block of cable giant Comcast Corporation and Timer Warner Cable Inc. The US$ 45 billion merger was announced in February 2014. In February 2014, Comcast Chief Financial Officer Michael Angelaki said “we are optimistic and feel comfortable” that the merger will close in early 2015. Bloomberg reported that U.S. Department of Justice (DOJ) staff attorneys in the department’s antitrust division were planning on recommending a block to the merger between Comcast and Time Warner Cable. Bloomberg’s sources are anonymous. Reportedly, DOJ attorneys working on the investigation are concerned the merger would create a “nationwide cable giant” that would hurt U.S. consumers. If the DOJ wants to block the merger, they will most likely file a federal lawsuit.

Streaming entertainment services like Netflix and Hulu have put enormous pressure on cable companies like Comcast.

Institutional Investors and Sovereign Wealth

Large institutional investors like Dodge & Cox, Wellington Management and Fidelity Investments are top ten holders of Comcast according to December 2014 filings. As of December 31, 2014, Norges Bank Investment Management (NBIM), the manager of Norway’s sovereign wealth fund, possessed 36,280,000 shares of Comcast – 1.7% of shares outstanding. On April 17th, Comcast opened at US$ 59.10 per share. Assuming NBIM’s shares remained constant since December 31, 2014, the wealth fund has a US$ 2.14 billion exposure to Comcast.

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