Two of the nation’s biggest cable companies, Charter Communications and Cox Communications, said they would merge in a deal valued at $34.5 billion at a time when traditional cable companies face an exodus of subscribers who are more interested in streaming video rather than the cable bundle they have relied upon for years.
Under terms of the deal, Charter will acquire Cox Communications’ commercial fiber and managed IT and cloud businesses, and Cox Enterprises will contribute Cox Communications’ residential cable business to Charter Holdings, an existing subsidiary partnership of Charter. Within a year after the closing, the combined company will change its name to Cox Communications. Charter’s Spectrum will become the consumer-facing brand within the communities Cox serves. The combined company will remain headquartered in Stamford, CT, and will maintain a significant presence on Cox’s Atlanta, GA campus following the closing, the companies said.
“We’re honored that the Cox family has entrusted us with its impressive legacy and are excited by the opportunity to benefit from the terrific operating history and community leadership of Cox,” said Chris Winfrey, President and CEO of Charter, in a statement. “This combination will augment our ability to innovate and provide high-quality, competitively priced products, delivered with outstanding customer service, to millions of homes and businesses. We will continue to deliver high-value products that save American families money, and we’ll onshore jobs from overseas to create new, good-paying careers for U.S. employees that come with great benefits, career training and advancement, and retirement and ownership opportunities.”
Winfrey will become president and CEO of the new combined company while Alex Taylor, chairman and CEO of Cox, will serve as chairman. The Newhouse family will continue as investors in the combined entity but Liberty Broadband, a vehicle for longtime media investor John Malone, will cease to be a direct shareholder in the company, as it has been in Charter.
The companies have chosen to join in an era when their relationships with TV networks are growing more fraught. Just this past week, three major TV outlets — Disney’s ESPN, Fox Corp. and Warner Bros. Discovery’s CNN — unveiled plans to launch stand-alone streaming properties that will have their media conglomerate partners dealing with video customers in direct fashion, without a third-party distributor. Fox, Warner and Disney have all stressed traditional cable customers will be able to reap some of the benefits of the new services without having to leave their current arrangements, but most analysts see that concept as short-term positioning aimed at assuaging the cable companies.
More to come….
