May 16 (UPI) — Charter Communications, one of the largest telecommunications companies in the United States, announced a merger Friday with privately held Cox Communications in a multi-billion-dollar deal.
Once the merger is completed, the new entity will retain the name of Atlanta-based Cox, a subsidiary of parent company Cox Enterprises, a private firm founded in 1898 that also has dealings in the automotive industry. Cox acquired its first cable franchise in 1962.
The deal gives Cox Communications a value of approximately $34.5 billion.
Charter Communications’ stock climbed sharply on the Nasdaq Composite at market open Friday before retreating somewhat. The company’s shares were up $7.03 or 1.68% at 10:42 a.m. EDT.
Under the terms of the deal, Connecticut-based Charter is acquiring all of Cox’s commercial fiber and managed IT and cloud businesses. Cox will also get $4 billion worth of cash and approximately $17.9 billion worth of combined shares, giving the parent company an approximately 23% ownership stake in the new venture.
The new company will remain headquartered in Stamford, Conn., and also assume an existing $12 billion worth of Cox Communications’ debt.
Prior to the deal, Charter was the largest cable operator in the United States, reaching over 32 million subscribers in 41 states. It was also the fifth-largest provider of residential phone lines.
Charter’s Spectrum brand will survive the merger and will “become the consumer-facing brand within the communities Cox serves.”
In 2017, Charter announced a partnership with Comcast Communications to share information about wireless services, a year after its $78.7 billion purchase of Time Warner Cable.
“Cox and Charter have been innovators in connectivity and entertainment services — with decades of work and hundreds of billions of dollars invested to build, upgrade, and expand our complementary regional networks to provide high-quality internet, video, voice and mobile services,” Charter President and CEO Chris Winfrey said in a jointly-issued 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 retain both executive titles upon completion of the deal.
“Our family has always believed that investing for the long-term and staying committed to the best interests of our customers, employees and communities is the best recipe for success,” Cox Enterprises Chairman and CEO Alex Taylor said in the companies’ statement.
“In Charter, we’ve found the right partner at the right time and in the right position to take this commitment to a higher level than ever before, delivering an incredible outcome for our customers, employees, suppliers and the local communities we serve.”