is going to double its size by buying AT&T broadband's cable systems in four states for about $2.22 billion in cash.
The companies did not disclose any financial details of the transaction, which they expect to close in the second or third quarter, pending certain closing conditions and regulatory review.
The deal with
broadband unit adds about 840,000 basic subscribers in Georgia, Illinois, Iowa and Missouri to Middletown, N.Y-based Mediacom's customer base. The deal makes the company the 8th largest cable company in the U.S. AT&T Broadband is the nation's largest broadband services company.
Credit Suisse First Boston
Salomon Smith Barney
served as financial advisors to Mediacom.
In an effort to get its business back in shape -- and help its battered stock price -- AT&T is breaking its business into several units. As part of the changes, the company is downshifting gears in its TV, cable modem and phone-over-cable department, saying it will run with the scale it has now, meaning an emphasis on more business from current markets and less of a push into new markets. Conserving cash and reducing its $65 billion debt is putting AT&T's cable expansion on the backburner, say some investors.
Scott Moritz recently wrote about AT&T's
Shares of Mediacom closed at $17.75 in Monday trading on the
, while A&T finished at $21.84 on the
New York Stock Exchange. AT&T hit a 52-week high of $61.