Charter and Cox to merge in major cable deal
Charter Communications and Cox Communications, two of the largest cable companies in the U.S., have agreed to merge.
The deal would be one of the largest in the industry — and across corporate America — in the last year.
The agreement values Cox at $34.5 billion on an enterprise basis — comprised of $21.9 billion of equity and $12.6 billion of net debt and other obligations — in line with Charter’s recent enterprise value based on 2025 estimated adjusted earnings before interest, taxes, depreciation and amortization multiple, according to a Friday news release.
Charter, the second largest publicly traded cable company behind Comcast, was up roughly 8% in premarket trading from its previous close of $419.57. Still privately run by the Cox family, Cox is among the biggest cable providers, too.
The broadband industry has been contending with heated competition from wireless competitors in recent years as there’s been a rise in alternate home internet options like 5G, or so-called fixed wireless. This follows the continued loss of customers from the traditional cable TV bundle.
Charter had 30 million broadband customers at the end of the first quarter, a decline of 60,000 from the prior period. It had about 12.7 million cable TV customers, with 181,000 losses during the quarter.
Cable companies have begun to lean on their mobile businesses to retain customers, and Charter has been aggressive in its pricing and bundling mobile lines. Charter said it had 10.5 million mobile lines as of the first quarter after reporting another quarter of growth.
The company provides its services in 41 states, and is available to more than 57 million homes and businesses. As of March 31, Charter said it had a total of 31.4 million customer relationships.
Cox Communications — a division of Cox Enterprises — counts itself as the largest privately held broadband company in the U.S., and has approximately 6.5 million total residential and commercial customers, per its website.
The company’s services are available to 7 million homes across 18 states, and it said it had $12.6 billion in total revenue as of 2020. Cox began offering mobile in 2023.
Upon closing of the merger, Cox Enterprises will own roughly 23% of the combined company’s fully diluted shares outstanding, according to the release.
The transaction will see the combined company change its name to Cox Communications within a year after the deal closes. Charter’s Spectrum, the brand on its cable, broadband, mobile and other services, will become the consumer-facing brand across all customers.
The combined company will take on Charter’s current headquarters in Stamford, Connecticut, although it will keep a significant presence in Cox’s home base in Atlanta after the closing.
Charter CEO Chris Winfrey will remain at the helm as president and CEO following the close of the deal. Meanwhile Alex Taylor, chairman and CEO of Cox Enterprises, will become chairman of the combined company’s board. Another Cox executive will join the board, and the Cox family will have the right to retain two board members.
The merger with Cox comes months after Charter announced it would acquire Liberty Broadband in an all-stock deal that simplifies cable scion John Malone’s portfolio. In February Charter and Liberty Broadband stockholders approved the proposed deal.
Charter expects there to be about $500 million in annualized cost synergies within three years of closing, according to the release.
The merger agreement with Cox is expected to close at the same time as the Liberty Broadband merger, the company said Friday.
Disclosure: Comcast, which competes with Charter and Cox, is the parent company of CNBC and NBC News.