Cable giant Time Warner, Inc. will buy Insight Communications for $3 billion.
Insight put itself up for auction earlier this year and attracted a host of large bidders. The bids at that time, however, were lower than Insight had reportedly sought, according to sources close to the deal. Company officials did not comment on the potential sale at the time.
Time Warner is the nation’s second-largest cable provider, and the purchase will give the company inroads in the midwestern market. Insight is the nation’s ninth-largest provider.
Businessweek reports that Time Warner “will begin a review of Insight’s employees to retain the best performers…Call-center operators and technicians will likely not be affected because the volume of work won’t change with the acquisition.”
The deal may generate annual cost savings of $100 million within two years, Time Warner Cable said in a statement today.
The acquisition is Time Warner Cable’s biggest since its spinoff from Time Warner Inc. in 2009 and may help the cable operator compensate for declining pay-TV demand. A wider footprint lets Chief Executive Officer Glenn Britt reach more customers while eliminating duplications in programming and corporate costs including staff and infrastructure.
Calls to Insight were not immediately returned.