US Cable Behemoths Charter and Cox announce $ 34.5 billion merger: all you need to know about the agreement | Company Business News

Charter Communications has agreed to acquire Cox communication in a $ 34.5 billion merger amid a long-standing battle facing cable companies due to the growing popularity of streaming services. The businesses have signed a definite agreement to combine their businesses into a transformative transaction. The proposed merger of Charter and Cox will bring together two of the top three cable companies in the US. Cox Communications is the third largest cable business in America. The company boasts 6.5 million digital cable, internet, telephone and home safety customers. It has a strong presence over states in the US, ranging from California to Virginia. On the other hand, Charter Communications, commonly known as Spectrum, has over 32 million customers in 41 US states. After the decision, shares of charter rose by more than 8 percent in the pre -market. Charter and Cox Deal Charter Communications said on Friday that it would acquire Cox Communications’ commercial fiber and manage it and cloud companies. Cox Enterprises will contribute Cox Communications’ residential cable business to Charter Holdings, an existing subsidiary partnership of Charter. Cox Enterprises will own about 23 percent of the fully diluted shares of the combined entity once the transaction is closed. As part of the agreement, Cox will cash $ 4 billion, according to a press release. In addition, the company is also entitled to an amount of $ 6 billion convertible preference units in Charter’s existing partnership. These units pay a 6.875 percent coupon and are convertible into charter partnership units, which can then be exchanged for Charter Common shares. Cox will also receive approximately 33.6 million ordinary units in Charter’s existing partnership, with an implied value of $ 11.9 billion, and which is interchangeable for ordinary charter shares. The transaction, which requires charter shareholders as well as regulators, contains $ 12.6 billion. After the agreement is completed, Chris Winfrey, CEO of Charter, president and CEO of the combined company. Cox CEO and chairman Alex Taylor will serve as chairman. The transaction is expected to close at the same time as the merger of Charter with Liberty Broadband, which was approved by Charter and Liberty broadband shareholders in February. Why do Charter and Cox merge? For years, the cable industry has been assaulting streaming services such as Disney, Netflix, Amazon and HBO Max, as well as internet plans offered by cellphone companies, according to a report by Reuters. The so -called “cord clipping” cost the industry millions of clients and searched for ways to compete successfully.