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Charter Communications Inc. (NASDAQ:CHTR) and Cox Communications on Friday announced an agreement to combine their businesses in a transaction that will create an industry leader in mobile and broadband communications services, seamless video entertainment, and high-quality customer service.
The proposed transaction valued Cox Communications at an enterprise value of approximately $34.5 billion, comprising $21.9 billion of equity and $12.6 billion of net debt and other obligations.
Charter will acquire Cox Communications’ commercial fiber, managed IT, and cloud businesses, and Cox Enterprises will contribute Cox Communications’ residential cable business to Charter Holdings, an existing subsidiary partnership of Charter.
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Cox Enterprises will receive $4 billion in cash, $6 billion notional convertible preferred units in Charter’s existing partnership, and approximately 33.6 million common units in Charter’s existing partnership, with an implied value of $11.9 billion, which are exchangeable for Charter common shares.
Cox Enterprises will own approximately 23% of the combined entity’s fully diluted shares outstanding. The combined entity will assume Cox’s roughly $12 billion outstanding debt.
The combined company will change its name to Cox Communications within a year of the closing. 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.
Charter CEO Chris Winfrey will continue in his current role as CEO and board member. Cox Enterprises Chair and CEO Alex Taylor will join the board as Chair.
Cox will have the right to nominate an additional two board members to Charter’s 13-member board. Advance/Newhouse, another storied cable innovator that contributed its operations to Charter’s partnership in 2016, will retain its two board nominees.
Liberty Broadband will cease to be a direct shareholder in Charter and will no longer designate directors for election to the Charter Board. Accordingly, the three current Liberty Broadband nominees on Charter’s board will resign at closing. Liberty Broadband shareholders will receive direct interests in Charter as a result of the Liberty Broadband merger.
In 2024, Charter agreed to buy Liberty Broadband Corp in an all-stock transaction in which Liberty Media Chair John Malone held significant interests. Malone remains the Chair of Liberty Broadband.