11 hours ago
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Charter Communications and Cox Communications, two of the largest cable companies in the U.S., have entered into an agreement 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 news release Friday.
Charter, the second largest publicly traded cable company behind Comcast, was up 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.
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.
The merger agreement with Cox is expected to close at the same time as the Liberty Broadband merger, the company said Friday.
This story is developing. Please check back for updates.
Disclosure: Comcast is the parent company of CNBC.
