US cable group Liberty Global is to buy the UK’s Virgin Media in a cash and stock deal worth $23.3bn to create the world’s largest broadband company, with 25 million customers across 14 countries.
Following the deal, about 80% of Liberty Global’s revenue will come from five European countries:
- the UK,
- Germany,
- Belgium,
- Switzerland and
- the Netherlands.
The merger, which is subject to shareholder and regulatory approval, will put Liberty Global owner John Malone in competition with Rupert Murdoch, whose media empire owns 39% of BSkyB.
Mike Fries, chief executive of Liberty Global, said: “Adding Virgin Media to our large and growing European operations is a natural extension of the value creation strategy we’ve been successfully using for over seven years.”
Under the terms of the agreement, Virgin Media shareholders will receive for each share they hold:
- $17.50 in cash,
- 0.2582 Liberty Global Series A shares and
- 0.1928 Liberty Global Series C shares for each Virgin Media shares.
Virgin Media reported a 30% rise in operating profit to £699.1m last year and said it added a record 88,700 new customers to its cable business during the year.
Virgin Group founder Sir Richard Branson, who retains a 2% stake in Virgin Media worth about $316m, said: “This deal is good news for the company, its customers and our people.
“Together, Liberty Global and Virgin Media are in a great position to shake up the industry and bring the full power of digital technology to UK consumers.”
Via: BBC Business