Charter Communications Eyes Altice USA Takeover Amidst Industry Consolidation Wave

📝 SUMMARY: In a strategic move that could reshape the telecommunications landscape, Charter Communications Inc. ($CHTR) is exploring the acquisition of Altice USA Inc. ($ATUS), according to sources familiar with the matter. This consideration comes at a time when both companies face significant challenges from a surge in wireless competition, which has been eroding their customer base and market positions. Altice USA's stock responded dramatically to the news, with a record jump of up to 63% in a single day, reflecting the largest increase since its separation from Europe's Altice NV in 2018.

Altice USA, which boasts a network reaching almost 5 million residential and business customers across 21 states, has been under financial pressure, evident from its substantial $25 billion debt. Meanwhile, Charter Communications, with a market valuation of about $50 billion despite a 22% decline in shares over the past year, is keen on consolidating its broadband and video services offerings in the face of losing customers to wireless and streaming services.

The potential takeover comes amidst a broader industry trend of consolidation, as companies aim to bolster their offerings and competitive edge through mergers and acquisitions. The news has put both companies under the spotlight, with Altice USA's market value appreciating to about $1.14 billion, despite its shares being down significantly from their peak in 2020. Charter's contemplation of this acquisition aligns with the strategies of Altice's billionaire owner, Patrick Drahi, who has indicated a willingness to sell parts of his telecommunications and media empire amid rising financing costs and a challenging business environment.

🔍 SOURCE: https://www.bloomberg.com/news/articles/2024-02-26/charter-communications-weighs-takeover-of-altice-usa