Major US cable TV companies Charter, owner of the Spectrum brand, and Cox Communications, which operates Contour TV, have agreed to merge, creating one of the largest US cable TV services.

In exchange for Cox’s commercial fiber, IT, and cloud business, Charter will pay a $4 billion cash consideration to Cox, in addition to $6 billion worth of convertible preferred stock, and 33.6 million common stock convertible units worth $11.9 billion.

The total consideration is worth around $21.9 billion, and Cox will control around 23% of the new merged entity.

Cox chair and chief executive Alex Taylor will step in as chair of the merged entity, while Charter chief executive and president Chris Winfrey will remain in his role.

Charter now adds 6.3 million Cox Customers to its business, with the Cox entity having generated revenue of 13.1 billion across 2024.

The new entity will change its name to Cox Communications within the year, but utilize the Spectrum brand as its consumer-facing operation.

It will possess an enterprise value of around $34.5 billion and be based out of the existing Charter headquarters.

Part of the logic behind the merger, explained by the pair, is to allow the new body to better compete in the current market against larger national broadband companies, with the new merged firm to operate in around 46 US states.

Across the calendar year 2024, Charter increased revenue year-on-year by 0.9% from 2023, up to $55 billion.

Both Charter and Cox are engaged in a number of carriage deals with media giants.

Perhaps most prominently, in September 2024, Charter agreed an early renewal of its distribution deal with Warner Bros. Discovery, agreeing to continue to carry its linear and OTT services, showcasing the strength of the Spectrum offering.