- Charter will acquire Cox Communications in a $34.B deal
- The merger will create 'an industry leader' in mobile and broadband communications, the companies said
- The combined company will change its name to Cox Communications once the deal closes
Well, that came out of left field. Charter announced today it is acquiring fellow cable operator Cox Communications for $34.5 billion.
The deal will see the companies combine under one name – Cox Communications – within a year after the transaction closes. Charter's Spectrum moniker will become the consumer-facing brand within the communities Cox serves.
Charter CEO Chris Winfrey said in a statement, “Cox and Charter have been innovators in connectivity and entertainment services – with decades of work and hundreds of billions of dollars invested to build, upgrade, and expand our complementary regional networks to provide high-quality internet, video, voice and mobile services.”
“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,” he added.
On a call with investors, Winfrey noted the deal will give Charter access to key markets, such as Phoenix and Las Vegas, as well as states like Virginia, Kansas, Oklahoma and Rhode Island that are adjacent to its current footprint. All told, Winfrey said the combined network will span 46 states and 78 million homes with 38 million customers “which we intend to grow.”
For context, Charter has a total of 31.4 million customer relationships (excluding mobile-only customers) and 57.2 million passings. Cox is a privately-held company but an investor presentation on the deal shows it has around 6.3 million customers and 12.3 million passings.
News of the Charter/Cox merger comes after Charter in November announced plans to acquire Liberty Broadband, where Charter essentially repurchased its shares at a discount. Liberty owns Alaskan operator GCI, but Charter notably did not get GCI as part of the deal. Following today's announcement, Liberty said it plans to "accelerate the closing" of its deal with Charter such that both the Cox and Liberty transactions will close contemporaneously.
What analysts are saying
Recon Analytics Principal Roger Entner called the deal "surprising but not shocking."
"There are significant merger efficiencies as the plant is very similar. Charter can now just play in a bigger market," he told Fierce. "This puts Charter effectively out of reach for both Deutsche Telekom and Comcast to purchase them in a hostile manner."
Given the merger is a geographic expansion, it's unlikely antitrust authorities will reject the deal on competition grounds, said New Street Research Policy Analyst Blair Levin in a note this morning. However, he does think there's a chance the Federal Communications Commission (FCC) serves up some conditions on the transaction.
FCC chief Brendan Carr has said he is prepared to block M&A proposals from companies that promote "invidious" diversity, equity and inclusion (DEI) practices. T-Mobile had to update its DEI policy to get the greenlight on its Lumos Fiber acquisition and the FCC today approved Verizon's $20 billion Frontier purchase shortly after Verizon announced it's dropping its DEI efforts.
The risk to investors, according to Levin, is that the FCC could try to "obtain conditions that serve the Trump Administration agenda, including but not limited to DEI, terms of retransmission consent, and carriage of favored news channels."
What it means for the network
It seems Charter won’t be including Cox’s footprint in its network upgrade plans, at least not to start with.
“In terms of the network, Cox is largely through an upgrade for what we would call a mid-split upgrade and they have two gigabit capabilities essentially everywhere,” Winfrey said on today's call. “There’s no rush for us to go try to harmonize that into a high split footprint.”
He continued: “In our planning, that eventual conversion to a DOCSIS 4 with DAA doesn’t take place for years out and it’ll be done at a lower cost as a result of them having already completed their mid-split and because of the scale that we’ll have at the time that we’re completing our own DOCSIS 4 and DAA upgrades.”
In addition to reaping benefits from economies of scale, Winfrey said the delay will give the companies time to fully migrate pricing and packaging and get back office systems aligned before making such a significant move.
Charter's stock as of press time was trading at $428.81, up 2.2%.
5/16/2025 10:55 a.m. ET: This story has been updated with comment from Recon Analytics' Roger Entner and New Street Research's Blair Levin, as well as details from the companies' call with investors.
UPDATE 5/16/2025 1:36 p.m. ET: This story has been updated to note the FCC today approved Verizon's Frontier acquisition just after Verizon announced it's ending its DEI policies.