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The biggest US merger of 2025 also looks like an IPO

The Charter-Cox deal is a transaction that looks to have been carefully engineered to suit strange times

In a fallow year for mergers and initial public offerings, it is fitting that the largest US transaction of the year should be a combination of both. On Friday, the John Malone-backed Charter Communications announced that it would acquire smaller pay TV and broadband rival Cox Communications for $34.5bn including net debt.

Cox is privately held by a family of the same name, with an empire that also includes local television networks and automotive trade publications. Of the $22bn equity purchase, only $4bn comes in cash with the rest in the form of Charter shares. The family will now own a quarter of the listed Charter, which after the tie-up will have an enterprise value of nearly $200bn and 38mn customers stretching across the US.

This is a far cry from the Charter that filed for bankruptcy 16 years ago. Liberty Media, controlled by “Cable Cowboy” Malone, took a stake in 2013. Since then Charter has shifted its emphasis to broadband internet, and lately internet on mobile devices.

As the merger market slowly thaws, it makes sense that logical, well-flagged mergers such as this one would happen first. It has long been clear that the US cable television industry is converging on a duopoly between Charter and Comcast. In volatile markets, it helps to have a seller prepared to accept shares instead of cash. The Cox clan will, by taking stock, get to share in any future snapback in value.

At an industry conference on Thursday, Charter’s chief executive Chris Winfrey said he weighed making acquisitions against the alternative of repurchasing the company’s shares. That shows in the fact that Charter has valued Cox at 6.4 times estimated ebitda for this year, the same multiple on which Charter itself trades. Factoring in the $500mn of expected cost savings, that falls to 5.9 times.

This ought to be a relief to shareholders who were stung by Charter’s $79bn acquisition of Time Warner Cable a decade ago, which came at nine times ebitda. And Winfrey could use some investor goodwill: Charter stock has almost halved since 2021, pressured by plateauing broadband subscribers, competition in mobile and a pay TV business already demolished by streaming services such as Netflix.

The Cox family is not quite as dependent as other shareholders on Charter’s valuation recovering: it has also taken $6bn of preferred securities that convert into shares at a price 35 per cent above where Charter is today. Until then, the preferred stock pays a 7 per cent annual dividend.

The result is akin to the family having finally taken its pay TV company public, but with some insurance against wobbly equity markets. It is the finishing touch on a transaction that looks to have been carefully engineered to suit strange times. Still, getting any kind of deal done this year feels like an accomplishment.

Howard Lutnick sells $361mn stakes to comply with US government rules

Trump’s commerce secretary will not pay any immediate tax on the gains as he also shifts Cantor ownership to a trust

Donald Trump’s commerce secretary Howard Lutnick will sell stakes in two publicly listed companies for $361mn to comply with government ethics rules.

The Wall Street investor and Trump campaign mega donor will sell his shares in BGC and Newmark for $234mn and $127mn, respectively, the companies said on Monday.

Separately, Lutnick also transferred his ownership in Cantor Fitzgerald into trusts for the benefit of his children, to be controlled by his son Brandon Lutnick.

Wall Street executives who join government ranks are often required to divest or place holdings in trust to avoid conflicts of interest. The rules allow such sales to be made without any immediate taxes on the gains in order to attract top talent without penalising them for liquidating assets.

The move further consolidates control of Cantor Fitzgerald in the hands of Brandon Lutnick, who was named chair of the holding company in February after his father was confirmed as commerce secretary.

The 27-year-old is emerging as a rising force on Wall Street under President Trump. He recently partnered with SoftBank, Tether and Bitfinex on a bitcoin-focused blank-cheque company aiming to capitalise on the crypto revival under the new administration.

As part of the leadership transition, Cantor named Pascal Bandelier, Sage Kelly and Christian Wall as co-chief executives. In December, the firm also hired Mike Whitaker from Citi as chief operating officer.

On Monday, Cantor also sold two minority stakes: one to 26North, the private capital firm led by Apollo co-founder Josh Harris, and another to Glenn August, founder of credit manager Oak Hill Advisors.

“As we enter the next chapter of our corporate journey, having the support of these world-class investors underscores the confidence in our management team and growth strategy,” said Brandon Lutnick.

Howard Lutnick, a longtime Trump ally, has played a key role in shaping the president’s trade agenda, including negotiating new tariff agreements with China and the EU.

He was also considered for US Treasury secretary and was among Trump’s top 2024 fundraisers, personally donating more than $10mn and helping raise about $75mn overall.

Other wealthy individuals have used the same mechanism to sell shares, reducing conflicts of interest but also avoiding millions of dollars of taxes.

Hank Paulson sold almost $500mn of Goldman Sachs shares in 2006 after he became Treasury secretary under president George W Bush. To take advantage of the scheme, the gains have to be put into US Treasuries or a broad mutual fund. Taxes are ultimately due if those investments are later sold.

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