The cable giants Charter Communications and Cox Communications said on Friday they had agreed to merge, a colossal deal that would create one of the biggest TV and internet providers in the United States.
The deal, which values Cox at roughly $34.5 billion, presents a test for President Trump’s antitrust enforcers. While many deal makers had expected the Trump administration to be more permissive than the Biden administration, many on Wall Street have been surprised by early signs that a tough-on-deals stance may persist.
Charter and Cox argued that the deal would help them compete against big rivals, including “larger, national broadband companies” — read: Comcast, Verizon and others — as well as satellite service providers. They are also likely to argue that their cable networks don’t significantly overlap geographically.
Charter and Cox signaled in their news release they were eager to secure the Trump administration’s approval of the deal. The announcement said that the merger “puts America first” by returning customer-service jobs from overseas, echoing the president’s campaign rhetoric. It also underscored the value of bringing “hyper-local, unbiased news” produced by Charter’s Spectrum News stations to Cox customers, an apparent gesture toward mollifying the White House, which has been critical of the press.
Unmentioned in the news release was Axios, a scoopy Washington-based media organization owned by Cox Enterprises, the privately held parent of the cable business as well as firms in other industries, like agriculture and cars. The newly formed cable group would not own any national programming, the release said.
Under the terms of the merger, Charter will pay cash and stock, with the combined company set to take on the Cox name and sell consumer services under the Spectrum brand within a year of closing. Cox Enterprises would become the new company’s largest shareholder, with a 23 percent stake. The group expects to cut $500 million in annual costs within a few years of closing the deal, from “typical procurement and overhead savings.”
