Charter, Cox Strike Deal to Create a U.S. Cable Giant

• Charter Communications (CHTR) and Cox Communications agreed to merge in a $34.5 billion deal, valuing Cox at $21.9 billion in equity and $12.6 billion in net debt, creating a cable giant with 37.5 million customers.
• The combined company, named Cox Communications with the Spectrum brand, will serve over 57 million homes across 41 states, led by Charter CEO Chris Winfrey and Cox CEO Alex Taylor as chairman, pending regulatory approval.
• Facing customer losses – Charter reported 30 million broadband and 12.7 million cable TV customers, down 60,000 and 181,000 respectively – the merger aims to counter streaming and 5G competition, bolstered by Charter’s 10.5 million mobile lines.

Charter Communications (CHTR) and Cox Communications, two titans of the U.S. cable industry, have agreed to a transformative $34.5 billion merger, creating a powerhouse to counter the relentless shift to streaming and wireless competition. The deal, valuing privately held Cox at $34.5 billion on an enterprise basis – comprising $21.9 billion in equity and $12.6 billion in net debt and other obligations – aligns with Charter’s 2025 estimated adjusted EBITDA multiple. Charter’s stock jumped 8% in premarket trading, climbing to $433.83 from its previous close of $419.57, as investor optimism drives momentum. If approved by regulators, the combined entity, to be named Cox Communications with Charter’s Spectrum as the consumer-facing brand, will serve approximately 37.5 million customers across 41 states, leveraging Charter’s 31 million and Cox’s 6.5 million customer bases.

The merger arrives as cable providers grapple with existential challenges. Charter, the second-largest publicly traded cable company behind Comcast (CMCSA), reported 30 million broadband customers at the end of the first quarter, down 60,000, and 12.7 million cable TV customers, with 181,000 losses. Cox, a major privately held player controlled by the Cox family, has faced similar pressures. The industry’s traditional TV bundle continues to hemorrhage subscribers, with millions opting for streaming services like Netflix. Meanwhile, broadband faces intensifying competition from 5G and fixed wireless alternatives. Charter has countered these trends by aggressively expanding its mobile business, boasting 10.5 million mobile lines after consistent growth, and promoting bundled streaming plans with ad-supported platforms to retain customers.

The deal, one of the largest corporate transactions in the past year, fulfills long-speculated consolidation in the cable sector, spurred by media mogul John Malone’s November remarks at a Liberty Media investor day advocating for a Charter-Comcast merger.

Charter CEO Chris Winfrey will lead the merged company, with Cox CEO Alex Taylor as board chairman, blending Charter’s operational scale with Cox’s regional legacy. Serving over 57 million homes and businesses, Charter’s infrastructure, combined with Cox’s 7 million addressable households, positions the new entity to compete against national rivals like Comcast and Verizon (VZ). However, regulatory approval remains a hurdle, given the deal’s potential to reshape the broadband and cable landscape.

Charter’s strategic pivot reflects broader industry trends toward consolidation to achieve scale and cost efficiencies. The company’s bundled offerings, integrating broadband, mobile, and streaming, have shown resilience, yet the loss of 60,000 broadband and 181,000 cable TV customers in the first quarter underscores the urgency of transformation. Cox’s integration could bolster Charter’s competitive edge, particularly in mobile and broadband, where scale is critical to counter tech giants encroaching on video and advertising markets. With 31.4 million total customer relationships as of March 31, Charter’s expanded footprint through this merger aims to stabilize its market position amid a rapidly evolving telecommunications landscape.

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