Charter Communications has offered to acquire Cox Communications, a $34.5 billion merger that would combine two of the top three cable companies in the U.S.

Cox is the third largest cable television company in the country, with more than 6.5 million digital cable, internet, telephone, and home security customers. It has a strong foothold in states spanning from California to Virginia. Charter Communications, known more widely as Spectrum, has more than 32 million customers in 41 states.

The cable industry has been under assault for years from streaming services like Disney, Netflix, Amazon and HBO Max, as well as internet plans offered by mobile phone companies. Comcast, which is of nearly equal size to Charter, spun off many of its cable television networks in November as as consumers increasingly swap out their cable TV subscriptions for streaming platforms.

‘Cord Cutting’ Changes the Industry

So-called “cord cutting” has cost the industry millions of customers and left them searching for ways to successfully compete.

Charter said Friday that it will acquire Cox Communications’ commercial fiber and managed IT and cloud businesses. Cox Enterprises will contribute Cox Communications’ residential cable business to Charter Holdings, an existing subsidiary partnership of Charter.

Cox Enterprises will own about 23% of the combined company’s outstanding shares.

The transaction, which needs approval from Charter shareholders as well as regulators, includes $12.6 billion in debt.

“This merger exemplifies the strategic consolidation reshaping media and telecom,” Scott Purdy, KPMG U.S. Media Industry Lead, Strategy, said in a statement. “By pooling resources, these companies will create scale, drive significant cost synergies, and strengthen their competitive positioning in a challenging market.”

The proposed deal is one of the largest in over a year. Mars’ announced a $30 billion deal with Kellanova last summer and Exxon Mobil’s approximately $60 billion acquisition of Pioneer Natural happened in late 2023.