Charter Communications (CHTR) and Cox Communications said Friday that they have agreed to combine their businesses in a $34.5 billion deal.

Under the deal, the companies said Cox's enterprise value includes $21.9 billion in equity and $12.6 billion in debt.

Post-close, Charter will absorb Cox's commercial fiber and managed IT and cloud businesses, while Cox will receive $4 billion in cash, $6 billion in preferred units, and $11.9 billion in common units in Charter's existing partnership, giving it a 23% stake in the merged firm.

The companies said the combined company, eventually to be renamed Cox Communications, will be led by Charter Chief Executive Officer Chris Winfrey and headquartered in Stamford, Connecticut.

Alex Taylor, Chairman and CEO of Cox Enterprises, will join the combined company board as chairman, the companies said, adding that Cox has the right to nominate two more board members to Charter's 13-member board.

The deal is expected to generate $500 million in annual cost savings within three years, they added.

Shares of Charter rose more than 7% in recent premarket activity.