Friday, the Cables Giants Charter Communications and Cox Communications said that they had agreed to merge, a colossal agreement that would create one of the largest providers of televisions and the Internet in the United States.
The agreement, which values COX at around 34.5 billion dollars, presents a test for the antitrust executors of President Trump. While many competitors expected the Trump administration to be more permissive than the Biden administration, many Wall Street were surprised by early signs that a difficult position on the records may persist.
Charter and Cox argued that the agreement would help them to compete with large rivals, including “largest national high speed companies” – to read: Comcast, Verizon and others – as well as satellite service providers. They are also likely to argue that their wired networks do not overlap geographically.
Charter and Cox pointed out in their press release that they were impatient to guarantee approval by the Trump administration of the agreement. The announcement indicated that the merger “puts America first” by returning customer service jobs from abroad, echoing the rhetoric of the president’s campaign. He also underlined the value of the “impartials” produced by Charter and Cox, an apparent gesture towards the currency of the White House, which criticized the press. (Notation in the press release was Axios, a media organization based in Scoopy Washington belonging to Cox.)
Under the terms of the merger, Charter will pay in cash and actions, the combined company should tackle in the name of Cox in the year following the fence. Cox would become the largest shareholder of the combined company, with a 23%participation. The group plans to reduce $ 500 million in annual costs in the few years following the conclusion of the agreement, of “typical purchases and general costs”.
It would not be the first time that the two have discussed a merger: they took place 12 years ago, and John Malone, the billionaire of telecommunications who is a major founding shareholder, had appointed Cox last fall as one of the potential transaction partners of the company.
The agreement is one of the largest controls announced so far this year, as well as the acquisition provided by Google from the Wiz cybersecurity supplier for $ 32 billion. And this can show that, at least for some business leaders, uncertainty about the economy, which is partly motivated by Mr. Trump’s trade policies is not enough to dissuade them from major investments and acquisitions.
But antitrust approval is necessary, and the Trump administration, which moved early to block agreements such as the acquisition of Hewlett Packard Enterprise at $ 14 billion in Juniper Networks, warned American companies not to assume that all transactions will pass.
“I have no ideological predisposition against Mr. & A.,” said Andrew Ferguson, president of the Federal Trade Commission last month. “It does not follow, however, that I think it should be just an open season” to make the agreement, he added.
