The takeover by American cable tycoon John Malone (whose Liberty empire will span 14 countries and have 25 million customers after taking on Virgin Media) threatens to topple Rupert Murdoch’s domination of pay television by forming Europe’s largest broadband business.
The deal will create the world’s largest broadband company, with 25 million customers in 14 countries. Here in the UK, it will be the second biggest pay-TV business after BSkyB.
“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,” said Mike Fries, chief executive of Liberty Global.
Virgin Media shareholders will receive $17.50 in cash, 0.2582 Liberty Global Series A shares and 0.1928 Liberty Global Series C shares for each Virgin Media share they hold. Virgin Media employs 14,000 people in the UK, with offices and call centres in London, Glasgow, Swansea, Birmingham, Manchester and Bradford. No customer-facing jobs are expected to go, despite plans by Liberty Global to save $180 million (£115 million) across its business.
Virgin founder Sir Richard Branson, who retains a 2% stake in Virgin Media worth approximately $316m, said: “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.”
In conjunction with the announcement of the deal, Virgin Media reported a 30% rise in profit to £699.1m last year, adding a record 88,700 new customers to its cable business during the year.
Virgin Media’s main listing is in the US on the Nasdaq technology stock exchange, where its shares jumped 17.9% on Tuesday amid speculation that a deal was imminent.
Subscribe below to be the first to receive our news and content.