For several years, the cable sector has faced challenges from streaming giants like Disney, Netflix, and HBO Max, as well as competitive internet services provided by telecom companies.
WASHINGTON — Charter Communications has proposed a merger with Cox Communications, a deal valued at $34.5 billion, aiming to merge two of the largest cable providers in the nation.
As the third biggest cable provider, Cox Communications serves over 6.5 million customers with digital cable, internet, phone, and home security services, stretching across states from California to Virginia. Charter Communications, commonly known as Spectrum, boasts more than 32 million subscribers across 41 states.
The cable industry has been under assault for years from streaming services like Disney, Netflix, Amazon and HBO Max, as well as internet plans offered by mobile phone companies.
So-called “cord cutting” has cost the industry millions of customers and left them searching for ways to successfully compete.
Charter said Friday that it will acquire Cox Communications’ commercial fiber and managed IT and cloud businesses. Cox Enterprises will contribute Cox Communications’ residential cable business to Charter Holdings, an existing subsidiary partnership of Charter.
Cox Enterprises will own about 23% of the combined company’s outstanding shares.
The transaction, which needs approval from Charter shareholders as well as regulators, includes $12.6 billion in debt.
The combined company will change its name to Cox Communications within a year after closing. It will keep Charter’s headquarters in Stamford, Connecticut, and have a significant presence on Cox’s Atlanta, Georgia campus following the closing.
After the deal is complete, Charter CEO Chris Winfrey will become president and CEO of the combined company. 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, which is part of Charter, will retain its two board members.
The transaction is expected to close at the same time as Charter’s merger with Liberty Broadband, which was approved by Charter and Liberty Broadband stockholders in February.
Shares of Charter rose more than 8% before the market open. Cox is a private company.
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