Latest news with #cableindustry
Yahoo
17-05-2025
- Business
- Yahoo
What would a Charter-Cox company look like?
HAMPTON ROADS, Va. (WAVY) — Two of the largest cable companies in America are merging, as Charter Communications is buying Cox Communications in a $34.5 billion deal. US cable giants Charter and Cox, under assault by streaming services, pursue $34.5 billion merger Both companies operate here in Hampton Roads. 'Historically, when mergers take place, we often say they're not good for the customers because they lead to consolidation and they reduce competition,' said Dr. Vinod Agarwal, economic professor at Old Dominion University's Strome College of Business. However, in this case, Agarwal said the acquisition is necessary because the industry is changing. 'You're going from cable services to streaming services to services provided by telephone companies,' Agarwal said, 'and the cable industry, to some extent, is dying in the sense that individuals have cut off cable and moved towards internet services and streaming services.' He thinks the merging of these two companies will be positive. 'So, this merger in my opinion … will be good for industry,' he said. 'Simply because now it will force these companies — and it will put these companies in a position — to start competing with the changing technology in this industry.' Agarwal said the merger of the two companies is 'a question of survival in the long run,' he said. 'You know, if the industry is changing and you don't change, you fall behind, and if you fall behind, you're dead.' Agarwal thinks together, the two companies can compete more aggressively. 'They are not saying that they are not going to abandon cable service,' Agarwal said. 'They are not saying this because you know why? There are millions of consumers who still like cable.' The professor said it's the principle of divide and conquer. 'What this essentially means is we are going to consolidate things,' he said. 'So one part of the company will focus on cloud services. Another part of the company will focus on cable services, but remember now there's only one company.' Agarwal also notes this possible joining of these two companies could bring more jobs to America. 'But this could also be a public relations campaign because President Trump is pushing for jobs at home … and that impact on the merged companies may not have any impact,' Agarwal said. '… it is also possible we may actually gain more jobs with a call center in Hampton Roads Agarwal also raised the questions of what would happen if this deal doesn't go through. 'If they don't merge, would they be able to survive,' Agarwal said. 'So in the long run we may be at the losing end without the merger.' Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Yahoo
17-05-2025
- Business
- Yahoo
Charter Communications buys Cox for $21.9 billion, a mega merger in the cable industry
plans to buy Cox Communications for $21.9 billion. The deal will create a major player in the cable and broadband industries, competing with Comcast. It comes as cable operators see subscriptions diminish in both areas. Charter Communications has struck a deal to buy Cox Communications for $21.9 billion, which will bring together two of the biggest cable and broadband companies in the U.S. The new entity will be called Cox Communications, but consumers will know it as Spectrum. The companies say they expect to see $500 million in annual cost savings with the merger. It's a notable changing of the guard at Cox, which is the longest continuous operator in the industry. The Cox family purchased its first cable television franchise in 1962. At the deal's conclusion, Cox will own 23% of the combined company. 'We're honored that the Cox family has entrusted us with its impressive legacy and are excited by the opportunity to benefit from the terrific operating history and community leadership of Cox,' Chris Winfrey, president and CEO of Charter, said in a statement. The merger comes as cable operators see subscriptions diminish and broadband customers explore other options. Charter lost 60,000 internet customers in the most recent quarter. The deal with Cox will give Charter an expanded footprint in the South as well as parts of Southern California. That could prove beneficial after Trump halted, at least temporarily, the rollout of the Biden administration's $42.5 billion broadband-construction program. Cable and broadband companies have been seeing increased competition on all fronts. Cell carriers are offering broadband service of their own and 5G cellular service is as fast as broadband offerings in some cities. In addition, consumers have moved to streaming services, which have aggressively chased customers with lower prices for the past several years. Live sports have kept many cable subscribers from cancelling their subscriptions, but leagues are increasingly exploring distribution options with those services. This story was originally featured on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Reuters
16-05-2025
- Business
- Reuters
Breakingviews - Charter deal runs valuable $35 bln extension cord
NEW YORK, May 16 (Reuters Breakingviews) - Charter Communications (CHTR.O), opens new tab is building a different sort of bundle. The U.S. cable operator agreed, opens new tab to acquire smaller rival Cox Communications in a $35 billion deal, including net debt. Hefty cost savings would come in handy as the industry wrestles with cord-cutting customers and other challenges. If trustbusters greenlight the combination, the best thing boss Chris Winfrey will be buying is time. The merger with family-owned Cox features quirky finance. Charter is paying $4 billion in cash and nearly 34 million partnership shares worth about $12 billion. Some $6 billion of convertible preferred units make up the rest, yielding almost 6.9%, or more than $400 million a year, until they're eligible to be exchanged for common stock. All in, Cox backers would own 23% of a company leapfrogging Comcast to be the largest U.S. cable provider, with 38 million customers. Cox offers some breathing room. Charter anticipates squeezing out $500 million of expenses a year, after valuing its quarry at the same 6.4 times multiple of EBITDA at which it trades. Those savings are worth almost $4 billion today, once taxed and capitalized. They'd be a welcome fillip to the bottom line of a company whose top line grew just 2% over the previous two years. More broadly, the transaction looks like a good use of Charter's capital. Generously add the synergies, which won't be fully achieved for a few years, to the $3 billion of operating income Cox generated in 2024, and the after-tax sum implies an 8% return from the enterprise. Charter's weighted average cost of capital is around 7.5%, per MoffettNathanson analysts, and New Street's reckon deal synergies could be even higher. The strategic benefits are tantalizing, too. Charter has been remaking itself as pay-TV subscribers flee for video streamers such as YouTube and mobile providers roll out WiFi service to compete with broadband. As the buyer expands its network, boosts internet speeds and grows in wireless with a Verizon Communications partnership, Cox has even more customers to target with a variety of packages. This fierce competition, from challengers both old and new, might ease the deal's regulatory path, but it's far from assured. When AT&T tried to consolidate the cellular market by acquiring smaller rival T-Mobile US in 2011, U.S. antitrust authorities blocked it. A few years later, Comcast's attempt to absorb Time Warner Cable met a similar fate. And scrutiny of M&A has only become tougher. Assuming Charter can get through Washington, however, it will have plugged in a useful extension cord. Follow @jennifersaba, opens new tab on X CONTEXT NEWS Charter Communications said on May 16 it had agreed to buy smaller rival Cox Communications for $34.5 billion, including debt, in a deal that would create the biggest U.S. cable operator with nearly 38 million customer relationships. Under terms of the deal, shareholders of privately held Cox would receive $4 billion in cash, a notional $6 billion of convertible preferred units paying a 6.875% coupon, and 33.6 million common shares with an implied value of $11.9 billion. Cox would own about 23% of the combined company. Charter said it expects to generate about $500 million of annual cost savings within three years of the deal closing. Citi and LionTree are advising Charter while Allen & Co. advises family-owned Cox Enterprises. BDT & MSD Partners, Evercore and Wells Fargo are advising the Cox Communications subsidiary.
CNET
16-05-2025
- Business
- CNET
Charter and Cox Have Announced a $34.5 Billion Merger
The cable industry is fighting back against streaming services with the announcement that Charter Communications and Cox Communications will merge. Charter, more commonly known as Spectrum, will buy Cox Communications for around $34.5 billion, one of the largest deals in the industry over the last year. It'll also become a much bigger broadband service provider. Charter is the second-largest publicly traded cable company behind Comcast. With over 6.5 million customers, Cox is the third-largest cable company. Combined, they would become the largest cable TV and broadband provider in the US. "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," said Chris Winfrey, president and CEO of Charter, in the press release on Friday. The combined companies would be called Cox Communications, with the name change to occur within a year of the deal closing. The merger is still subject to regulatory and Charter shareholder approvals before it is final, however. According to the release, Charter will buy Cox Communications' commercial fiber and managed IT and cloud businesses. Cox Enterprises will contribute Cox Communications' residential cable business to Charter Holdings, which is an existing subsidiary partnership of Charter. Locating local internet providers A representative from Charter Communications did not immediately respond to comment.
Globe and Mail
16-05-2025
- Business
- Globe and Mail
US cable giants Charter and Cox, under assault by streaming services, pursue $34.5 billion merger
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. 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.
