Charter Communications (CHTR) M&A Announcement summary

Deal rationale and strategic fit

• The combination creates a leading connectivity and entertainment company with a national footprint, 69.5M passings, and 37.6M–38M customer relationships, enhancing scale and competitiveness in key markets like Los Angeles, San Diego, Las Vegas, and Phoenix.

• Spectrum brand and products will be launched across Cox's ~12M passings, improving sales, marketing, and branding versus national competitors.

• The partnership leverages complementary strengths in customer service, innovation, B2B operations, and commercial offerings.

• The combined network will span 46 states, passing nearly 70 million homes and businesses.

• The company will change its name to Cox Communications within a year of closing.

Financial terms and conditions

• Cox Communications is valued at approximately $34.5B (6.44x 2025E Adj. EBITDA), including $21.9B equity and $12.6B net debt/obligations.

• Cox Enterprises receives $21.9B consideration: $11.9B in Charter partnership common units, $6.0B in convertible preferred units, and $4.0B cash.

• Cox will own ~23% of the combined company, Advanced Newhouse 10%, and other shareholders 67%.

• Transaction includes assumption of $12.0B Cox IG debt, $0.7B finance leases, and $4.0B new debt to fund cash payment.

• Target leverage for the combined company is 3.5-4.0x within 2-3 years post-close.

Synergies and expected cost savings

• $500M in annualized transaction cost synergies are expected within 3 years of closing, primarily from procurement and overhead savings.

• Additional upside anticipated from revenue and operating cost synergies, as well as CapEx savings, not included in the initial synergy estimate.

• Higher pro forma growth rates and margin expected, driving share price and free cash flow accretion.

• Synergies do not include immediate MVNO or programming benefits due to Cox's later start in mobile.