Roger Yu

USA TODAY

Cable giant will pay %24159 a share for Time Warner Cable

Comcast beat out a rival offer from Charter Communications

Deal will need to be approved by antitrust regulators

Comcast agreed to buy Time Warner Cable for $45 billion Wednesday night, swooping in to top a bid by Charter Communications to merge the nation's top two cable companies in a huge media deal, according to a person familiar with the matter.

In the all-stock deal, Comcast will pay $159 per share, representing an 18% premium from TWC's Wednesday closing price of $135.31.

TWC's shares have been rising as Comcast and Charter, backed by John Malone-led Liberty Media, have been jostling for months to acquire TWC and its 15 million customers, who subscribe to Internet, cable TV and phone services.

The deal is expected to be confirmed by both companies on Thursday morning, but even so any agreement will face intense scrutiny from antitrust regulators, who will have to wade through the issues of competitive pressures and the effects on pricing stemming from merging two cable giants.

But the cable industry could be entering a period of consolidation as it faces challenges from multiple directions, and struggling companies may need a white knight if they are to sustain their business. As evidenced by TWC's costly fight with CBS Corp. last year over retransmission fees, TV station owners are demanding higher fees for the right to broadcast their signal. Cable networks are demanding higher fees for their shows, as cost of programming, particularly for sports events, rises. And consumers are increasingly ditching their expensive cable bills for online streaming options.

The number of TWC's residential consumers fell by 85,000 to 14.4 million in the fourth quarter, partly due to its dispute with CBS.

With the competition between Charter and Comcast for TWC's assets so stiff, there had been reports late last year that the two companies may jointly bid for a deal.

Malone, a cable industry legend and chairman of Liberty Media, has been advocating industry consolidation. With Liberty Media's large stake in Charter, Malone's desire to facilitate a deal for Charter to buy TWC has been widely known.

Despite the struggles in the video and phone businesses, consumer demand for faster Internet continues to grow, and the industry will devote more resources to enhancing networks. Such initiatives will require heavy investment, which Comcast could certainly bring to the table.

Comcast owns a little over 20% of the market. A combined Comcast-TWC would account for 33% of the pay-TV subscribers in the U.S., notes Craig Moffett, an industry analyst at Moffett Nathanson Research. "A company of that size would arguably have de facto control of what content could and couldn't exist in the U.S.," he wrote in a report last year. "A programmer that failed to get a distribution deal with Comcast arguably wouldn't be economically viable."

The companies by the numbers:

Comcast

CEO: Brian L. Roberts

Headquarters: Philadelphia

2013 revenue: $64.7 billion

Wednesday stock close (Class A shares): $55.24

Employees: 129,000

Total customers: 53 million

Time Warner Cable

CEO: Robert D. Marcus

Headquarters: New York City

2013 revenue: $22.1 billion

Wednesday stock close: $135.31

Employees: 51,000

Total customers: 15 million

Source: Comcast, Time Warner Cable