The Transaction Will Create an Industry Leader
in Communications, Seamless Entertainment and High-Quality Customer
Service that Will Benefit Employees, Customers, Local
Communities and Shareholders
STAMFORD, Conn. and ATLANTA, May 16, 2025
/PRNewswire/ -- Charter Communications, Inc. (NASDAQ: CHTR)
(along with its subsidiaries, "Charter") and Cox Communications
("Cox") today announced that they have entered into a definitive
agreement to combine their businesses in a transformative
transaction that will create an industry leader in mobile and
broadband communications services, seamless video entertainment,
and high-quality customer service delivering powerful benefits for
American employees, customers, communities, and shareholders. The
proposed transaction values Cox Communications at an enterprise
value of approximately $34.5
billion1 based on, and at parity with, Charter's
recent enterprise value to 2025 estimated Adjusted EBITDA trading
multiple.
"We're honored that the Cox family has entrusted us with its
impressive legacy and are excited by the opportunity to benefit
from the terrific operating history and community leadership of
Cox," said Chris Winfrey, President
and CEO of Charter. "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. We will continue to
deliver high-value products that save American families money, and
we'll onshore jobs from overseas to create new, good-paying careers
for U.S. employees that come with great benefits, career training
and advancement, and retirement and ownership opportunities."
The Cox family is the longest continuous operator in the
industry, having acquired its first cable television franchise in
1962. "Our family has always believed that investing for the
long-term and staying committed to the best interests of our
customers, employees and communities is the best recipe for
success," said Alex Taylor, Chairman
and CEO of Cox Enterprises. "In Charter, we've found the right
partner at the right time and in the right position to take this
commitment to a higher level than ever before, delivering an
incredible outcome for our customers, employees, suppliers and the
local communities we serve."
"Charter's board and I are excited about this transaction and
very supportive of Alex stepping into the board Chairman role,"
said Eric Zinterhofer, Chairman of
Charter's Board of Directors. "The combination of Cox
Communications with Charter is an excellent outcome for our
collective shareholders, customers, employees and the
industry."
1. Comprised of $21.9 billion of
equity and $12.6 billion of net debt
and other obligations.
Structure and Timing
In the transaction, Charter will acquire Cox Communications'
commercial fiber and managed IT and cloud businesses, and Cox
Enterprises will contribute Cox Communications' residential cable
business to Charter Holdings, an existing subsidiary partnership of
Charter. Cox's assets have been valued using Cox's 2025 estimated
Adjusted EBITDA, multiplied by Charter's total enterprise value to
2025 estimated Adjusted EBITDA trading multiple of 6.44x, based
on:
- Wall Street consensus for Charter's 2025 Adjusted EBITDA,
and
- Charter's (NASDAQ: CHTR) 60-day Volume Weighted Average Price
of $353.64, as of 4/25/25.
As consideration in the transaction, Cox Enterprises will
receive:
- $4 billion in cash,
- $6 billion notional amount of
convertible preferred units in Charter's existing partnership,
which pay a 6.875% coupon, and which are convertible into Charter
partnership units, which are then exchangeable for Charter common
shares, and
- Approximately 33.6 million common units in Charter's existing
partnership, with an implied value of $11.9
billion1, and which are exchangeable for Charter
common shares.
Based on Charter's share count as of March 31, 2025, at the closing, Cox Enterprises
will own approximately 23% of the combined entity's fully diluted
shares outstanding, on an as-converted, as-exchanged basis, and pro
forma for the closing of the Liberty Broadband merger. The
transaction is subject to customary closing conditions, including
the receipt of regulatory and Charter shareholder approvals. The
combined entity will assume Cox's approximately $12 billion in outstanding debt.
Within a year after the closing, the combined company will
change its name to Cox Communications. Spectrum will become the
consumer-facing brand within the communities Cox serves. The
combined company will remain headquartered in Stamford, CT, and will maintain a significant
presence on Cox's Atlanta, GA
campus following the closing.
1. Assumes 33.6 million common units are exchanged for 33.6
million Charter common shares, multiplied by Charter's (NASDAQ:
CHTR) 60-day Volume Weighted Average Price of $353.64, as of 4/25/25.
Governance
Following the closing, Mr. Winfrey will continue in his current
role as President & CEO, and board member. Mr. Taylor will join
the board as Chairman, and Mr. Zinterhofer will become the lead
independent director on Charter's board. Cox will have the right to
nominate an additional two board members to Charter's 13-member
board. Advance/Newhouse, another storied cable innovator, which
contributed its operations to Charter's partnership in 2016, will
retain its two board nominees.
It is expected that Charter's combination with Cox will be
completed contemporaneously with the previously announced Liberty
Broadband merger. As a result, Liberty Broadband will cease to be a
direct shareholder in Charter and will no longer designate
directors for election to the Charter Board. Accordingly, the three
current Liberty Broadband nominees on Charter's board will resign
at closing. Liberty Broadband shareholders will receive direct
interests in Charter as a result of the Liberty Broadband
merger.
Upon closing, Charter, Cox Enterprises and Advance/Newhouse will
enter into an amended and restated stockholders agreement, which
will provide for preemptive rights over certain issuances, voting
caps and required participation in Charter common share repurchases
at specified acquisition caps, and transfer restrictions among
other shareholder governance matters.
Community Leadership
The Cox family of businesses was founded 127 years ago on the
promise of "building a better future for the next generation." Both
Cox and Charter want to see that intent reinforced in this new
partnership. The Cox family's commitment to supporting its
communities through the philanthropic work of the James M. Cox
Foundation will be continued by Charter's $50 million grant to establish a separate
foundation that will encourage community leadership and support
where the combined company does business. Additionally, Charter
will make an initial $5 million
investment to establish an employee relief fund that mirrors the
Cox Employee Relief Fund, which Cox and the Cox family created in
2005 to help employees through times of hardships such as natural
disasters or other unexpected life challenges.
Strategic and Customer Objectives
Following the closing, the combined company's industry-leading
products will launch across Cox's approximately 12 million passings
and 6 million existing customers, under the Spectrum brand –
including Spectrum's Advanced WiFi, Spectrum Mobile with Mobile
Speed Boost, the Spectrum TV App, Seamless Entertainment and Xumo –
and which, when coupled with Spectrum's transparent and
customer-focused pricing and packaging structure, will provide Cox
customers with enhanced flexibility and convenience, as well as the
choice to pay less for new Spectrum bundled services or to keep
their current plans.
The new combination will create a best-in-class customer service
model. That model will integrate Cox's rich service history with
Charter's 100% U.S.-based, employee-focused service and sales model
and industry-leading customer commitments. Charter customers will
benefit from Cox Business' well-known industry leadership in
business telecommunications, including Segra and RapidScale.
Charter and Cox employees will benefit from investments in
employee-focused technology and AI tools and an expansion of
Charter's self-progression career advancement model for promotions
and standardized pay increases.
Specific benefits from the combination include:
- The combined company will bring together the best products and
practices of each company to benefit all of the combined company's
customers and employees.
- The combined company will be better positioned to aggressively
compete in an expanding and dynamic marketplace that includes:
- Larger, national broadband companies with wireline and
wireless capabilities,
- Regional wireline and mobile competitors,
- Global video distribution providers and platforms, and
satellite broadband companies.
- The combined company also will be better positioned for
continued and expanded investment and innovation:
- In mobile, given the increased footprint;
- In video, where Big Tech currently leverages global scale in
content and distribution;
- In advertising, where the transaction will expand opportunities
for advertisers large and small, national, regional, and local,
bringing new competition in an area now dominated by Big Tech;
- In the business sector, where the combined company will have
additional coverage, yet still remain a regional player competing
against larger, national competitors;
- And through greater product innovation in areas including AI
tools and small cell deployment of licensed, shared licensed and
unlicensed spectrum, bringing new and advanced services and
capabilities to consumers and businesses.
- Cox customers will gain access to Charter's simple and
transparent pricing and packaging structure, including no annual
contracts for any residential services, which means customers are
free to change service providers at any time, with no risk of early
termination fees.
- Cox customers also will benefit from Charter's industry-first
Customer Service Commitments, which include:
- Charter's 100% U.S.-based customer service team available
24/7.
- Charter has committed to fixing service disruptions quickly,
including same-day technician dispatch when requested before
5:00 pm; if not, the next day.
- Charter provides customers credits for outages that last longer
than two hours.
- This proposed transaction puts America first by returning jobs
from overseas and creating new, good-paying customer service and
sales careers.
- The combined company will adopt Charter's sales and service
workforce model, which will fully return Cox's customer service
function to the U.S.
- All employees will earn a starting wage of at least
$20 per hour and will gain access to
Charter's industry-leading benefits, which include:
- Comprehensive medical, dental, and vision coverage for all
full-time and part-time employees; Charter has absorbed the full
premium cost increase for the last 12 years.
- Market-leading retirement benefits, including a 401(k) plan
with a company match up to 6% of their eligible pay, with an
additional 3% contribution available for most employees.
- Free or discounted Spectrum Mobile, TV and Internet
service.
- Multiple opportunities for upward advancement and to build
careers, including through tuition-free undergraduate degree and
certificate programs via flexible online learning; self-progression
programs with standardized pay raises, and formal development
programs, such as the Broadband Field Technician Apprenticeship
program.
- Employee Stock Purchase Plan, which provides frontline
employees the ability to purchase stock and receive a matching
grant of Charter Restricted Stock Units (RSUs) up to 1 for 1 based
on years of service, offering employees another meaningful
incentive to grow their careers with Charter.
- The combined company will expand Charter's award-winning local
Spectrum News stations in the Cox footprint, bringing hyper-local,
unbiased news coverage to more communities. The combined company
will not own any national programming.
- The combined company will retain its industry leadership in
protecting the security of U.S. communications networks from
foreign threats.
Financial Outlook
By deploying Charter's operating strategy across Cox's
footprint, the combined company will:
- Offer Cox customers the choice to pay less for new Spectrum
bundled services or to keep their current plans,
- Invest in more U.S.-based employees,
- Continually improve service quality,
- And support the development of third-party platforms for new
consumer products through continuing network evolution.
Despite those investments, the combined business is expected to
produce higher cash flow per passing and investment returns over
time by creating and preserving more relationships on a fixed
network, selling more products to each customer, and reducing
operating and capital costs per passing by lowering service
transactions, churn and fixed cost leverage.
Charter also currently expects approximately $500 million of annualized cost synergies
achieved within three years of close – stemming from typical
procurement and overhead savings.
As part of the transaction, Charter expects to assume
approximately $12 billion of Cox
Communications debt at closing and will have approximately 3.9x net
leverage, including the impact of the Liberty Broadband and Cox
transactions, based on the net debt of each company as of
March 31, 2025. Charter expects to
adjust at closing its long-term target leverage range to 3.50 –
4.00x to reflect the enhanced size of its balance sheet.
Citi and LionTree are serving as financial advisors and
Wachtell, Lipton, Rosen & Katz is serving as legal counsel to
Charter. Allen & Company is serving as financial advisor to Cox
Enterprises. BDT & MSD Partners, Evercore and Wells Fargo
are serving as financial advisors to Cox Communications. Latham
& Watkins LLP is serving as the legal advisor to Cox
Enterprises.
Webcast
Charter will host a webcast on Friday,
May 16, 2025 at 8:30 a.m. Eastern
Time (ET) related to the contents of this release. The
webcast can be accessed live via the Company's investor relations
website at ir.charter.com. Participants should go to the webcast
link no later than 10 minutes prior to the start time to register.
The webcast will be archived at ir.charter.com two hours after
completion of the webcast.
About Charter
Charter Communications, Inc. (NASDAQ:CHTR) is a leading
broadband connectivity company and cable operator with services
available to more than 57 million homes and businesses in 41 states
through its Spectrum brand. Over an advanced communications
network, supported by a 100% U.S.-based workforce, the Company
offers a full range of state-of-the-art residential and business
services including Spectrum Internet®, TV, Mobile and Voice.
More information about Charter can be found at
corporate.charter.com.
About Cox Communications
Cox Communications is committed to creating meaningful moments
of human connection through technology. As the largest private
broadband company in America, Cox Communications owns network
infrastructure that reaches more than 30 states. Cox
Communications' fiber-powered wireline and wireless connections are
available to more than 12 million homes and businesses and support
advanced cloud and managed IT services nationwide. Through Cox
Business, Hospitality Network, RapidScale and Segra, Cox
Communications provides a broad commercial services portfolio
including advanced cloud, managed IT and fiber-based network
solutions that create connected environments, unique hospitality
experiences and support operational applications for nearly 370,000
businesses. We're the largest division of Cox Enterprises, a
family-owned business founded in 1898 by Governor James M. Cox that is dedicated to empowering
others to build a better future for the next generation.
Cautionary Note Regarding Forward Looking Statements
This communication includes forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended (the "Securities Act") and Section 21E of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), regarding,
among other things, the proposed transaction between Charter and
Cox. Although we believe that our plans, intentions and
expectations as reflected in or suggested by these forward-looking
statements are reasonable, we cannot assure you that we will
achieve or realize these plans, intentions or expectations.
Forward-looking statements are inherently subject to risks,
uncertainties and assumptions including, without limitation: (i)
the effect of the announcement of the proposed transaction on the
ability of Charter and Cox to operate their respective businesses
and retain and hire key personnel and to maintain favorable
business relationships; (ii) the timing of the proposed
transaction; (iii) the ability to satisfy closing conditions to the
completion of the proposed transaction (including stockholder and
regulatory approvals); (iv) the possibility that the transaction
may be more expensive to complete than anticipated, including as a
result of unexpected factors or events; (v) the ultimate outcome
and results of integrating operations and application of Charter's
operating strategies to the acquired assets and the ultimate
ability to realize synergies at the levels currently expected as
well as potential dis-synergies; (vi) the impact of the proposed
transaction on our stock price and future operating results,
including due to transaction and integration costs, increased
interest expense, business disruption, and diversion of management
time and attention; (vii) the reduction in our current
stockholders' percentage ownership and voting interest as a result
of the proposed transaction; (viii) the increase in our
indebtedness as a result of the proposed transaction, which will
increase interest expenses and may decrease our operating
flexibility; (ix) litigation relating to the proposed transaction;
(x) other risks related to the completion of the proposed
transaction and actions related thereto; and (xi) the factors
described under "Risk Factors" from time to time in Charter's
filings with the SEC. Many of the forward-looking statements
contained in this communication may be identified by the use of
forward-looking words such as "believe," "expect," "anticipate,"
"should," "planned," "will," "may," "intend," "estimated," "aim,"
"on track," "target," "opportunity," "tentative," "positioning,"
"designed," "create," "predict," "project," "initiatives," "seek,"
"would," "could," "continue," "ongoing," "upside," "increases,"
"grow," "focused on" and "potential," among others.
All forward-looking statements speak only as of the date they
are made and are based on information available at that time.
Charter assumes no obligation to update forward-looking statements
to reflect circumstances or events that occur after the date the
forward-looking statements were made or to reflect the occurrence
of unanticipated events except as required by federal securities
laws. As forward-looking statements involve significant risks and
uncertainties, caution should be exercised against placing undue
reliance on such statements.
Additional Information
Charter intends to file a proxy statement with the SEC in
connection with the proposed transaction. Investors and security
holders of Charter and Cox are urged to read the proxy statement
and/or other documents filed with the SEC carefully in their
entirety if and when they become available as they will contain
important information about the proposed transaction. The
definitive proxy statement (if and when available) will be mailed
to stockholders of Charter. Investors and security holders will be
able to obtain free copies of these documents (if and when
available) and other documents filed with the SEC by Charter
through the website maintained by the SEC
at http://www.sec.gov or by contacting the investor relations
department of Charter at 400 Washington Blvd., Stamford, CT 06902, Attention: Investor
Relations, (203) 905-7801.
Participants in Solicitation
This communication is neither a solicitation of a proxy nor a
substitute for any proxy statement or other filings that may be
made with the SEC. Nonetheless, Charter and its directors and
executive officers and other persons may be deemed to be
participants in the solicitation of proxies in respect of the
proposed transaction. Information regarding the interests of such
potential participants will be included in one or more proxy
statements or other documents filed with the SEC if and when they
become available. These documents (if and when available) may be
obtained free of charge from the SEC's website
http://www.sec.gov.
Charter anticipates that the following individuals will be
participants (the "Charter Participants") in the solicitation of
proxies from holders of Charter common stock in connection with the
proposed transaction: Eric L.
Zinterhofer, Non-Executive Chairman of the Charter Board, W.
Lance Conn, Kim C. Goodman, John D.
Markley, Jr., David C.
Merritt, Steven A. Miron,
Balan Nair, Michael A. Newhouse, Martin E. Patterson, Mauricio Ramos, Carolyn
J. Slaski and J. David Wargo,
all of whom are members of the Charter Board, Christopher L. Winfrey, President, Chief
Executive Officer and Director, Jessica M.
Fischer, Chief Financial Officer, and Kevin D. Howard, Executive Vice President, Chief
Accounting Officer and Controller. Information about the Charter
Participants, including a description of their direct or indirect
interests, by security holdings or otherwise, and Charter's
transactions with related persons is set forth in the sections
entitled "Proposal No. 1: Election of Directors", "Compensation
Committee Interlocks and Insider Participation", "Compensation
Discussion and Analysis", "Certain Beneficial Owners of Charter
Class A Common Stock", "Certain Relationships and Related
Transactions", "Proposal No. 2: Approve the Charter Communications,
Inc. 2025 Employee Stock Purchase Plan", "Pay Versus Performance"
and "CEO Pay Ratio" contained in Charter's definitive proxy
statement for its 2025 annual meeting of shareholders, which was
filed with the SEC on March 13, 2025
(which is available at
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001091667/000114036125008627/ny20042259x1_def14a.htm)
and other documents subsequently filed by Charter with the SEC. To
the extent holdings of Charter stock by the directors and executive
officers of Charter have changed from the amounts of Charter stock
held by such persons as reflected therein, such changes have been
or will be reflected on Statements of Change in Ownership on Form 4
filed with the SEC.
No Offer or Solicitation
This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval, nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offer of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act.
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SOURCE Charter Communications, Inc.
