New York
CNN
—
Two of the biggest cable companies in the United States have agreed to merge, marking a major milestone in consolidation as cord-cutters continue to ditch their pricey TV packages, thus forcing companies to adjust to their dwindling futures.
Charter Communications, which operates under the Spectrum branding, is combining with its privately held rival Cox Communications, which it values at $34.5 billion including debt, the two companies announced Friday.
Combining helps both of the companies on several fronts. The first is growing competition from AT&T, T-Mobile and other wireless providers, which are poaching customers with their own broadband services and packaging them with wireless plans. Plus, people are ditching their pay-TV packages for cheaper streaming options and further chipping away at the cable companies’ once-lucrative bottom lines.
A combined entity will help both companies compete against wireless services and improve their offerings.
“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 Charter CEO Chris Winfrey in a statement.
Charter’s (CHTR) stock jumped more than 6% on the news and is one of the few cable companies to have a decent year, rising about 22% since January. The company keeps adding more mobile users, making up for their losses in cable subscribers.
Cox is the largest division of Cox Enterprises, which is a family-owned firm founded in 1898 and has stakes in cable, automotive and media companies. The combined company will be called Cox Communications, but Spectrum will be the consumer-facing name.
The headquarters will be located at Charter’s offices in Stamford, Connecticut, with a “significant presence” at Cox’s campus in Atlanta.
The transaction is contingent on regulatory approval and could be a litmus test for President Donald Trump’s views on major companies combining.
