Altice NV, billionaire Patrick Drahi’s European cable operator, agreed to acquire Cablevision Systems Corp. in a $17.7 billion deal to create the fourth-largest cable provider in the U.S.

Cablevision investors will receive $34.90 a share in cash, or 22 percent more than the stock’s last close in New York. Altice will finance the purchase with $14.5 billion of new and existing debt at Cablevision, and $3.3 billion of cash from Altice it’ll raise by selling new shares. BC Partners and CPP Investment Board have an option to buy as much as 30 percent of Cablevision, Altice said Thursday.

Altice jumped as much as 13 percent in Amsterdam. Cablevision, controlled by the Dolan family, would vault Altice into the ranks of major pay-TV players in the U.S. and accelerate Drahi’s push to create a cross-Atlantic cable giant. The company agreed in May to buy majority control of St. Louis- based Suddenlink Communications in a $9.1 billion deal that marked the first U.S. foray by the French-Israeli tycoon.

Big changes in viewing habits are driving consolidation among pay-TV providers and spurring entertainment companies, their programming suppliers, to consider moves of their own. Cable and satellite TV in the U.S. suffered the largest subscriber losses ever in the second quarter, in part because of the popularity of web TV services like Netflix Inc. That’s threatening the industry’s two sources of revenue: ads and subscriber fees.

Cablevision, based in Bethpage, New York, advanced 16 percent to $33.10 in early U.S. trading. Altice added 3.4 percent to 25.17 euros at 12:34 p.m. in Amsterdam, after rising as high as 27.41 euros.

Cablevision owns money-losing New York-area newspaper Newsday and TV station News 12, and Altice has committed to funding them, according to a person familiar with the matter.

The U.S. pay-TV industry is consolidating rapidly. AT&T Inc. acquired DirecTV, the biggest satellite operator, in July for about $65 billion, including debt, and John Malone’s Charter Communications Inc. is scooping up Time Warner Cable Inc., the No. 2 cable company after Comcast Corp., in a transaction valued at $79.2 billion.

Cablevision had 2.6 million video subscribers as of the second quarter, according to data compiled by Bloomberg, while Suddenlink had about 1.1 million. By comparison, DirecTV had 20.3 million and Time Warner Cable almost 11 million.

Altice’s offer values Cablevision at 9.64 times estimated 2015 earnings before interest, taxes, depreciation and amortization, compared with the 9.35 times U.S. peers are valued at on average, according to Bloomberg Intelligence.

Drahi, 52, has built Altice into one of Europe’s most acquisitive telecommunications companies since its 2014 initial public offering. With a cable and phone empire stretching from Israel to France and the Caribbean, Drahi also used Altice to expand in media. His net worth tops $16 billion, eclipsing cable rivals including Malone, who is worth $8.6 billion, according to the Bloomberg Billionaires Index.

In June, Drahi unveiled a plan to convert Altice into a holding company to gain a new stock for future takeovers without risking a major dilution in his control. The following month, Drahi said he was interested in acquiring U.S. cable companies such as Cablevision, sending the stock up.

Debt financing has been a key component of Drahi’s acquisition strategy. Altice’s net debt reached 26 billion euros last quarter and any interest-rate increase would make it more costly to borrow money. Economists remain split on whether the Federal Reserve will announce the first interest-rate hike in nine years today.

The Dolan family holds about 72 percent of the voting power at Cablevision through Class B shares that have 10 votes each. The family also controls AMC Networks Inc. and Madison Square Garden Co., spinoffs from Cablevision.

The company was founded in 1973 by Charles Dolan, one of the pioneers of the cable TV industry. He started HBO before selling it to what was then called Time-Life. The 88-year-old billionaire is chairman of Cablevision, which is run by his 60- year-old son James, the chief executive officer.

JPMorgan Chase & Co., BNP Paribas SA and Barclays Plc advised Altice. Bank of America Corp., Guggenheim Securities and PJT Partners assisted Cablevision.


--With assistance from Lucas Shaw and Rob Golum in Los Angeles.