US cable giants Charter and Cox, under assault by streaming services, pursue $34.5 billion merger

Key Points

• Charter Communications has proposed a $34.5 billion merger to acquire Cox Communications, combining two of the top three U.S. cable operators to better compete with streaming services.
• The deal covers Cox’s residential cable assets and commercial fiber and IT units, includes $12.6 billion in debt, and leaves Cox Enterprises owning about 23% of the combined company.
• Facing years of customer losses to Disney, Netflix and other streaming rivals, the companies say the merger will create scale, drive cost synergies and strengthen their position amid ongoing “cord‐cutting.”
• Upon closing—pending shareholder and regulatory approval—the firm will rebrand as Cox Communications, with Charter CEO Chris Winfrey as president & CEO and Cox’s Alex Taylor as chairman.

Charter Communications has offered to acquire Cox Communications, a $34.5 billion merger that would combine two of the top three cable companies in the U.S.

Cox is the third largest cable television company in the country, with more than 6.5 million digital cable, internet, telephone, and home security customers. It has a strong foothold in states spanning from California to Virginia. Charter Communications, known more widely as Spectrum, has more than 32 million customers in 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. Comcast, which is of nearly equal size to Charter, spun off many of its cable television networks in November as as consumers increasingly swap out their cable TV subscriptions for streaming platforms.

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.

“This merger exemplifies the strategic consolidation reshaping media and telecom," Scott Purdy, KPMG U.S. Media Industry Lead, Strategy, said in a statement. “By pooling resources, these companies will create scale, drive significant cost synergies, and strengthen their competitive positioning in a challenging market.”

The proposed deal is one of the largest in over a year. Mars' announced a $30 billion deal with Kellanova last summer and Exxon Mobil's approximately $60 billion acquisition of Pioneer Natural happened in late 2023.

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 slightly in afternoon trading. Cox is a private company.