M&A News: Charter Communications Stock (CHTR) Rallies on Cox Communications Deal

Cable companies Charter Communications (CHTR) and Cox Communications will transition from regional powerhouses to competing against national rivals after a merger. This deal values Cox Communications at $34.5 billion, including its $12 billion of outstanding debt. Charter Communications will pay for the merger with $4 billion in cash, $6 billion in convertible preferred units, and 33.6 million common units valued at $11.9 billion. This will give Cox a 23% stake in CHTR.

Within a year after the merger, Charter Communications will change its name to Cox Communications. However, Spectrum will remain the consumer-facing brand. Charter President and CEO Chris Winfrey will lead the combined company, while Cox Chairman and CEO Alex Taylor will join the Charter Board as its Chairman. Cox will also gain the right to nominate two directors to the 13-person Board. The combined company will maintain its Stamford, CT headquarters, with Cox’s Atlanta, GA base serving as a major hub.

Charter Communications and Cox Communications also expect significant savings from the combination. The combined company is expected to report $500 million in annual cost synergies within three years of the deal’s closing. No estimated timeline for the deal’s closure has been announced.

CHTR Stock Movement Today

Charter Communications investors appear pleased by the Cox Communications merger news. Shares of CHTR stock experienced a strong 4.5% gain in pre-market trading, building on a 22.41% rally year-to-date, and extending its 53.68% growth over the last 52 weeks.

Is CHTR Stock a Buy, Sell, or Hold?

Turning to Wall Street, the analysts’ consensus rating for Charter Communications is Moderate Buy, based on eight Buy, five Hold, and three Sell ratings over the past three months. With that comes an average CHTR stock price target of $423.44, representing a potential 0.92% upside for the shares.

See more CHTR stock analyst ratings