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Altice SA is in advanced talks to buy Cablevision Systems Corp., the latest move by the European cable company to build a communications empire in the U.S.

A deal between the two companies could be announced as soon as Thursday, according to people familiar with the matter. Altice is expected to pay $34.90 a share, one of the people said. That would value Cablevision, which has a market value of $7.9 billion, at roughly $18 billion including its heavy debt load. The deal would rank as one of the larger takeovers in a roaring year for mergers and acquisitions. Cablevision's stock rose 16% in after-hours trading on The Wall Street Journal's report of a possible deal.

As always with M&A, it is possible the deal could fall apart at the last minute.

Altice, run by billionaire investor Patrick Drahi, has become a prolific consolidator on both sides of the Atlantic. After completing a series of deals in Europe including the $23 billion takeover of France's second-biggest wireless-phone operator SFR, Mr. Drahi in May opened a new frontier in the U.S. by inking a $9 billion deal to buy cable company Suddenlink Communications. Altice then quickly turned its attention to Time Warner Cable Inc., which was in the process of negotiating a sale to Charter Communications Inc. Charter beat Altice to that prize, with a $55 billion deal to buy TWC that is pending. But people close to Mr. Drahi made it clear then that he wasn't done building a presence in the U.S.

Altice, which is based in Luxembourg and has operations from France to Israel, has a market capitalization of €24 billion ($27.1 billion). The company has built a reputation for aggressive deal making and cost-cutting.

In Europe, Mr. Drahi has been able to cut costs by bundling four products: TV, high-speed Internet and fixed- and mobile-phone services. That so-called quadruple-play model doesn't yet exist on a large scale in the U.S.

"My vision is to do the same in the U.S., but bigger," Mr. Drahi said in an interview with The Wall Street Journal over the summer.

Mr. Drahi is scheduled to speak at an investor conference in New York on Thursday.

Cablevision, the fifth-largest U.S. cable company and eighth-largest provider of pay-TV services, has been widely seen as a potential acquisition target in a fast-consolidating industry where a few heavyweights are in dominant positions. AT&T Inc. became the No. 1 pay-TV provider when it closed its purchase of DirecTV in July. Comcast Corp. is the largest broadband provider, and Charter will leap to the top ranks if regulators approve its proposed takeover of TWC.

Bethpage, N.Y.-based Cablevision serves 3.1 million customers across its TV, voice and high-speed data services throughout the New York metropolitan area. It generated $6.5 billion in revenue in 2014, with net income of $311 million. The Dolan family controls Cablevision with a 72.3% voting stake, according to the company's proxy filing, and owns cable-network company AMC Networks Inc. as well as Madison Square Garden Co. Like other cable operators, Cablevision has been gradually shedding video consumers as they "cut the cord."

For years, merger advisers and media executives speculated that Cablevision could be an acquisition target, but doing a deal with the Dolans was seen as difficult because of the high valuation they have attached to their assets. Chuck Dolan founded Cablevision in 1973 in Long Island. Mr. Dolan is now 88 years old and the company is run by his son James, who is CEO, with a lot of other family members in various executive roles. In 2007, the Dolan family made a $10.6 billion offer to take Cablevision private, an effort that was rejected by shareholders.

For Altice, securing Cablevision's footprint in New York would be a major step toward its goal of becoming a big player in the media-and-telecommunications business in the U.S. But there are plenty of challenges too. For one, Cablevision has a high penetration of its territory, leaving limited room for growth, and it faces a stiff regional competitor in Verizon Communications Inc.'s FiOS offering.

James Dolan has said he wants to transform the cable operator away from its television roots into a "connectivity" company.

Mr. Dolan has banked on the future of the higher-margin broadband service to make up for dwindling video customers and has said that there may come a day when Cablevision stops offering cable-TV service completely.

At an investor conference in June, Mr. Dolan said the number of customers paying for the traditional big bundle of cable TV channels is going to shrink by about 20% to 25% over the next five years, as consumers opt instead for smaller packages of channels or online-video options. In April, Cablevision launched low-cost, cord-cutter TV packages with broadband service and a free digital antenna to pick up local TV signals.

The cable operator also reached a deal with streaming-video service Hulu to offer on-demand shows and movies, becoming the first cable or satellite TV provider to strike such a partnership.

Write to Dana Mattioli at dana.mattioli@wsj.com, Ryan Knutson at ryan.knutson@wsj.com and Shalini Ramachandran at shalini.ramachandran@wsj.com

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(END) Dow Jones Newswires

September 17, 2015 01:05 ET (05:05 GMT)

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