Charter wraps up $34.5B Cox deal, Liberty acquisition

Charter Communications completed its $34.5 billion deal for Cox Communications, consolidating two of the largest cable providers in the US, alongside a concurrent all-stock acquisition of Liberty Broadband.

The sweeping multi-billion dollar deal expands the Charter Spectrum footprint across a unified 45-state territory, positioning the combined entity to directly challenge national telecommunications operators and global entertainment platforms in an increasingly competitive market.

Under the terms of the Cox transaction, a subsidiary of Cox Enterprises received approximately 33.6 million common units in Charter’s existing partnership, valued at roughly $5 billion; $6 billion in convertible preferred units carrying a 6.875% coupon, convertible into 12.6 million common units; and approximately $4 billion in cash.

In aggregate, Charter issued the equivalent of just over 46 million Charter shares to the Cox Enterprises subsidiary. Combined with the assumption of approximately $12 billion in existing Cox debt and finance leases, Cox Enterprises and its subsidiaries now own approximately 26% of the combined entity’s fully diluted shares outstanding.

Under the Liberty Broadband transaction, each holder of Liberty Broadband common stock received 0.236 of a Charter share, resulting in the retirement of approximately 38.6 million Charter shares previously owned by Liberty Broadband and the issuance of about 33.9 million new shares, a net reduction of roughly 4.7 million shares outstanding.

Charter also assumed approximately $840 million of Liberty Broadband net debt, to be repaid shortly after closing, along with $180 million of preferred equity which converted into Charter preferred stock.

The combined company plans to adopt the Cox Communications brand within the next year while continuing to operate under the Spectrum name across all markets, remaining headquartered in Stamford, Connecticut, and with a continued presence Cox’s former headquarters in Atlanta, Georgia.

Spectrum’s full suite of products, pricing and packaging is scheduled to launch across all former Cox markets in mid-September.

As an initial incentive, Spectrum is offering former Cox internet subscribers who don’t already have Cox Mobile a free year of mobile service.

Alex Taylor, chairman and CEO of Cox Enterprises, has been appointed chairman of Charter’s board, while Chris Winfrey continues as president and chief executive.

Eric Zinterhofer, Charter’s former board chairman, becomes lead independent director. Cox Enterprises also placed CEO Dallas Clement and Cox Communications president Mark Greatrex on Charter’s 13-member board.

Beyond consumer markets, the deal combines Spectrum Business with Cox Business assets including Segra, Cox’s fibre-based provider serving commercial enterprise and carrier customers, and RapidScale, its managed cloud services provider.

Winfrey stated the addition of Cox to Spectrum’s footprint gave the combined company greater scale to compete with national and global connectivity and entertainment providers, as regional operators face growing competitive pressure across the broadband and pay-TV market.