Shares of broadband provider Altice USA jumped over 50% on Monday following a report that Charter Communications is considering acquiring the company.
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According to Bloomberg, Charter is working with financial advisors to evaluate whether purchasing Altice USA would be beneficial. Charter has allegedly not made a formal offer yet.
In response to the report, Charter’s stock price dropped nearly 2% on Monday afternoon. The company declined to comment on the acquisition rumors.
An Altice USA acquisition would allow Charter, which already has 32 million broadband and cable customers, to further consolidate the market as major communications providers struggle to retain subscribers. Altice USA has 5 million customers under its Optimum brand for broadband internet, TV, and phone services.
Altice’s share price has plunged over 40% year-to-date prior to Monday’s jump. Charter’s stock has also fallen approximately 25% in 2022.
By combining forces, the companies could potentially save costs and better compete in the rapidly evolving communications landscape. However, significant regulatory scrutiny would be expected with such a large acquisition between major industry players.
