Cable giant charter and Cox hunt for $34.5 billion merger amid streaming service attack
Cox is the third largest cable company in the country, with over 6.5 million digital cable, internet, telephone and home security customers. It has a foothold in states from California to Virginia. Charter Communications has more than 32 million customers in 41 states, known as Spectrum.
The cable industry has been attacked for years by streaming services such as Disney, Netflix, Amazon and HBO Max, as well as internet plans offered by mobile phone companies. Comcast, which is nearly equal to the Charter, broke away from many of its cable networks in November as consumers increasingly promote its streaming platform for cable subscriptions.
The so-called “rope cutting” has cost the industry millions of customers and left behind ways to find successful competition.
The charter said Friday it will acquire Cox Communications’ commercial fiber and manage it and its cloud business. Cox Enterprises will contribute Cox Communications’ residential cable business to Charter Holdings (Charter Holdings), an existing subsidiary partnership in the Charter.
Cox Enterprises will own 23% of the combined company’s outstanding shares. The deal requires approval from franchised shareholders and regulators, including $12.6 billion in debt. The proposed deal is one of the deals in over a year. Last summer, Mars announced a $30 billion deal with Kellanova, with Exxon Mobil taking over Pioneer Naturally at the end of 2023.
The merged company will change its name to Cox Communications within one year of its closure. It will retain its Charter headquarters in Stamford, Connecticut and hold a significant position in Atlanta, Georgia after the closure.
After the deal is completed, Charter CEO Chris Winfrey will become the president and CEO of United. Cox CEO and Chairman Alex Taylor will serve as chairman.
Cox will be able to keep two directors on the 13-member board. Advance/Newhouse, part of Charter, will retain two of its board members.
The deal is expected to be completed at the same time as the merger of Charter and Liberty Broadband, which received approval from Charter and Liberty broadband shareholders in February.
Before the market opened, Charter stocks rose more than 4%. Cox is a private company.
