Time Warner Cable (NYSE: TWC) announced today that it will acquire Duke Energy (NYSE: DUK) and Alinda Capital Partners' jointly owned fiber optics company, DukeNet, for $600 million in cash and debt repayments.
DukeNet's network spreads 8,700 miles of fiber-optic cable across seven Southeast states, and provides services to various customers, from wireless carriers to government.
Duke Energy's sale of its 50% stake represents a step toward focusing more exclusively on energy operations. "This is a positive transaction for Duke Energy," said Marc Manly, president of Duke Energy's commercial business group, in a statment. "The sale completes Duke Energy's transition out of DukeNet, which although a growing operation, is a non-core business to our company."
For Time Warner, the acquisition is expected to expand key growth areas. Phil Meeks, executive vice president and COO of business services for Time Warner Cable, said in a statement:
Business Services is a key growth area for Time Warner Cable and this acquisition will greatly enhance our already growing fiber network to better serve customers, particularly those in key markets in the Carolinas. This acquisition will help us expand our fiber footprint at a price that is consistent with our disciplined approach to M&A, accounting for expected synergies and tax benefits.
The deal is expected to close in the first quarter of 2014.