Charter Communications has extended an offer to acquire Cox Communications in a sizable merger valued at $34.5 billion. If given the green light, this move will unite two of the top three cable companies in the United States.
Reports indicate that Cox Communications, holding the position of the third-largest cable television company in the country, services over 6.5 million customers with digital cable, internet, telephone, and home security. Its influence spans from California to Virginia. Charter Communications, more commonly recognized as Spectrum, boasts over 32 million customers spread across 41 states.
The cable industry has faced increasing pressure from streaming services such as Disney, Netflix, Amazon, and HBO Max, as well as internet plans offered by mobile phone companies. This trend, often referred to as “cord-cutting”, has cost the industry millions of customers, pushing cable companies to seek innovative strategies to remain competitive.
According to reliable sources, Charter announced on Friday its intentions to acquire Cox Communications’ commercial fiber, managed IT, and cloud businesses. As part of the deal, Cox Enterprises will contribute Cox Communications’ residential cable business to Charter Holdings, a subsidiary partnership of Charter. Furthermore, Cox Enterprises will retain about 23% of the combined company’s outstanding shares.
This development follows earlier reports that the transaction, which requires approval from Charter shareholders and regulators, includes $12.6 billion in debt. The merged company plans to adopt the Cox Communications name within a year of closure and will maintain Charter’s headquarters in Stamford, Connecticut. In addition, it will establish a significant presence on Cox’s Atlanta, Georgia campus.
Upon completion of the deal, Charter CEO Chris Winfrey will transition to the role of president and CEO of the combined entity, while Cox CEO and Chairman Alex Taylor will serve as chairman. Cox will retain two directors on the 13-member board, and Advance/Newhouse, part of Charter, will also keep its two board members.
The transaction is projected to coincide with Charter’s merger with Liberty Broadband, approved by Charter and Liberty Broadband stockholders in February. Charter’s shares rose more than 8% before the market opened. Cox remains a private company.
