Charter Communications to Buy Cox Communications and Liberty Broadband in $15 Billion Deal
The mixed-consideration transaction aims to create a national leader in broadband and video while accelerating the integration of Liberty Broadband.
Charter Communications, Inc. (CHTR), the broadband connectivity and cable operator, completed the acquisition of Cox Communications and Liberty Broadband Corporation (LBRDA) in a mixed-structure deal. The transaction for Cox Communications was valued at approximately $15 billion, consisting of $5 billion in implied value for common units, $6 billion in convertible preferred units, and $4 billion in cash.
As part of the broader consolidation, Charter acquired Liberty Broadband Corporation. Shareholders of Liberty Broadband received 0.236 of a share of Charter common stock for each share of Liberty Broadband common stock held. The acquisition of Liberty Broadband was accelerated to occur contemporaneously with the Cox combination.
Charter said the transactions were designed to create the leading broadband and video company in the United States and the fastest-growing mobile provider within its footprint. The company intends to leverage the combination to provide seamless connectivity and video entertainment.
“The addition of Cox to the Spectrum footprint is one that can be celebrated by customers, employees and investors alike,” said Chris Winfrey, Charter’s President and CEO.
Under the terms of the agreement, the combined entity will assume approximately $12 billion of Cox's outstanding debt. The company also announced it will change its corporate name to Cox Communications within one year of the closing. While the corporate name will change, the Spectrum brand will serve as the consumer-facing brand within the communities previously served by Cox.
Governance changes accompanying the deal include Alex Taylor joining the board as chairman and Mr. Zinterhofer becoming the lead independent director. Cox will have the right to nominate two additional members to Charter's 13-member board, while the three Liberty Broadband nominees on the board resigned at the closing.