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Charter to buy cable operator Bright House for $10.4 billion

If the deal is approved, Charter Communications will become the No. 2 cable company in the US, at a time when more people are cutting the cord in favor of services like Netflix and Amazon Prime.

The deal between Charter and Bright House also involves other cable operators. CNET

Cable operator Charter Communications is gobbling up fellow cable operator Bright House Networks for $10.4 billion in cash and stock, Charter announced Tuesday.

Serving around 2 million customers in Florida, California and other states, Bright House is the sixth-biggest cable company in the US. Currently the nation's fourth-largest cable company, Charter would become the second-largest following the acquisition.

The deal is the latest in a cable industry that's seeing more consolidation.

Comcast is attempting to unite with Time Warner Cable, while AT&T is planning to pick up DirectTV. These mergers are happening at the same time more consumers who don't want to pay for expensive cable TV packages are turning to Internet-based services such as Netflix and Amazon Prime. Even HBO is trying to appeal to cord-cutters by unbundled its service from a traditional cable subscription via its new HBO Now service.

The deal also involves other cable operators. As part of Comcast's $45 billion agreement to buy Time Warner Cable, Charter agreed to pay about $7.3 billion in cash for Time Warner's 1.4 million customers, while it will swap another 1.6 million customers with Comcast, The Wall Street Journal said.

The transaction itself will be conducted through a partnership of which Charter will own 73.7 percent and Bright House parent company Advance/Newhouse will own 26.3 percent. The deal is subject to several conditions, including Charter shareholder approval, the expiration of Time Warner Cable's right of first offer for Bright House, the close of Charter's previously announced transactions with Comcast and the standard regulatory approval.

"Bright House Networks provides Charter with important operating, financial and tax benefits, as well as strategic flexibility," Charter Communications CEO Tom Rutledge said in a statement.