Charter's Last-Gasp Tie-Up With Cox Is Worth the Risk

THE RAINMAKERS HAVE worked their sorcery. A drought in big-ticket mergers and acquisitions is ending with a downpour.

- Bloomberg

Charter Communications Inc. had previously telegraphed its appetite to acquire assets in its cable industry backyard. But Friday's serving of a $34.5 billion deal for closely held peer Cox Communications is still a sizable move even for a buyer with an enterprise value of around $160 billion.

Both companies face challenges from telecommunications rivals like AT&T Inc. in broadband and from streamers like Netflix Inc. in content. A jumbo cable tie-up won't eliminate these twin threats, but the hope is that it helps make the problems easier to manage. The merger benefits are the conventional attractions of any domestic combination in the same industry — efficiency and cross-selling to each other's customers.