The regional phone company US WEST said Tuesday its Media Group has agreed to buy the nation's third-biggest cable television system operator, Continental Cablevision, in a $10.8 billion deal.
The deal has wide ramifications for the changing cable and telecommunications landscape. It is the biggest deal since the recent enactment of legislation that gives phone and cable companies greater authority to get into each other's businesses.US WEST is already a major investor in the cable systems controlled by Time Warner Inc., which is the nation's second-biggest cable system owner.
As a result of the deal, US WEST will become one of the biggest forces in the cable television business with stakes in systems that have more than 16.2 million subscribers nationwide.
Under terms of the deal, the US WEST Media Group will pay $5.3 billion in cash and stock for all of Continental's shares.
In addition, it will assume Continental's debt, which currently stands at about $5.5 billion.
Continental Cablevision, based in Boston, has 4.2 million cable subscribers with most of them concentrated in five large markets - New England, California, Chicago, Florida and the Michigan-Ohio area.
US WEST is based in Englewood, Colo., and was one of the regional phone companies created in the breakup of AT&T's Bell System more than a decade ago.
Its communications division serves more than 25 million customers in 14 Western and Midwestern states, while its media group has interest in cable TV systems both domestically and abroad.
It owns a 25 percent stake in a joint venture with Time Warner, which has cable TV systems reaching 11.5 million subscribers.
It also acquired systems on its own last year that serve more than 500,000 subscribers mainly in the Atlanta area.