Charter Communications said Friday it would buy privately held rival Cox Communications for $21.9 billion, uniting two of the largest US cable and broadband operators as they battle streaming giants and mobile carriers for customers.
American media companies are considering options for their once lucrative cable TV businesses that are now in decline as millions of consumers pivot to streamers such as Netflix.
The merger — one of the biggest deals of the year globally — will help Charter better bundle broadband and mobile services, as it tries to keep customers from switching to wireless providers such as T-Mobile that have their own internet plans.
Charter’s strategy of combining internet, TV and mobile services into a single, customizable package helped it beat quarterly revenue estimates last month.
Analysts say the strategy’s appeal is obvious, but it needs scale as cable firms rely on leasing network access from major carriers to offer mobile plans.
“This combination will augment our ability to innovate and provide high-quality, competitively priced products,” said Charter CEO Chris Winfrey, who will head the combined company.
Charter shares were up nearly 2%.
As part of the cash-and-stock deal, Charter will also assume Cox’s about $12.6 billion of net debt and other obligations.
That gives the deal an enterprise value of about $34.5 billion.
Cox Enterprises will own about 23% of the merged entity, with its CEO Alex Taylor serving as chairman.
The combined firm will rebrand as Cox Communications within a year of the deal’s close, with Charter’s Spectrum becoming the consumer-facing brand in Cox markets.
Cox Communications is the largest division of Cox Enterprises — a family-controlled firm founded in 1898 by former Ohio governor James Cox, with interests in cable, automotive and media including Axios.
Charter and Cox had also discussed a merger in 2013 before shelving the plan.
But speculation had risen again in recent months after cable billionaire John Malone said in November Charter should be allowed to merge with rivals such as Cox, shortly after Charter agreed to buy his Liberty Broadband.
Without specifying a date, Charter said its buyout of Cox was expected to close alongside the previously announced Liberty Broadband deal.
Liberty Broadband shareholders will receive direct interest in Charter under the terms of the deal with Cox.
