Altice Group, the European telecom giant that announced Thursday it would buy Cablevision Systems Corp. for $17.7 billion, is banking that the road to prominence in the United States begins on Long Island.
The move to buy the Bethpage-based company is Altice's boldest step yet toward its goal of stitching together U.S. cable assets and offering them in tandem with Internet, telephone and mobile service. And it gives Altice 3.1 million customers in one of the nation's most affluent regions.
"I'm coming here because it's a beautiful market," Patrick Drahi, founder and president of Altice, said during a talk at an investor conference Thursday in Manhattan.See alsoCheck a stock price
The deal, which needs approval from regulators, is expected to close by mid-2016. The acquisition would make Altice the fourth-largest cable operator in the United States, behind Comcast, Time Warner Cable and Charter Communications.
The move marks a turning point for one of Long Island's largest companies. Cablevision, founded in 1973 by Charles F. Dolan, employs nearly 14,000 people. In addition to cable TV, it offers high-speed Internet access and digital phone service, and it owns media properties including Newsday, News 12 Long Island and amNewYork.
"We expect that Cablevision will be in excellent hands," Cablevision chief executive James L. Dolan said in a statement.
Drahi said there are no plans for broad job reductions at Cablevision. He and his team, however, plan $900 million in cost cuts and "synergies." That will include streamlining billing and customer service, and management changes involving high-paid executives, Drahi said.
Altice's chief executive, Dexter Goei, said in an interview that the company plans to keep Newsday and the other media outlets and allow them to remain editorially independent. "We have no intentions of selling those businesses," he said. "I think the Dolans had a great strategy of owning local media outlets," which he said were important to the local community.
The deal with Altice won't affect other companies controlled by the Dolan family, including the sports and entertainment company Madison Square Garden Co. and cable channel company AMC Networks.
Altice will pay $34.90 for each share of Cablevision stock, which rose 14 percent Thursday to $32.51. Altice said the transaction will be financed with $14.5 billion of new and existing debt at Cablevision, cash on hand at Cablevision and $3.3 billion of cash from Altice.
Drahi, a French-Israeli entrepreneur, has built Altice into a telecom juggernaut with customers from Israel to the Dominican Republic. The company, headquartered in the Netherlands, was founded in 2002 and has 9,363 employees, according to Bloomberg.
Altice first pushed into the U.S. market in May, buying a 70 percent stake in the cable group Suddenlink Communications for $9.1 billion. The company, based in St. Louis, has about 1.5 million subscribers.
Drahi made it clear during his remarks Thursday that he plans to continue expanding on this side of the Atlantic. That includes eventually buying a mobile phone network in the United States, he said.
But don't expect another acquisition right away, he said.
"This is moving fast," Drahi said. "But we are not in a hurry."