Liberty Global to acquire Virgin Media for $23.3bn
Negotiations between international cable operator Liberty Global and UK MVNO and cable network operator Virgin Media appear to have been successful, as Liberty has announced that it has entered into an agreement to acquire Virgin Media for approximately $23.3bn.
The deal is subject to shareholder approval, and reflects a 24 per cent premium to Virgin Media’s closing price on February 4, 2013, according to Liberty Global.
The firm said that with its new acquisition it intends to create the “world’s leading broadband communications company”, covering 47 million homes and serving 25 million customers across 14 countries.
The combined company will be focused on the strongest markets in Europe, and will benefit from combined expertise across digital TV, broadband and telephony services. Liberty Global added that it saw significant potential to monetise its customer base, with an opportunity to deliver current customers enhanced bundled and premium services.
“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, president and CEO of Liberty Global. “Virgin Media will add significant scale and a first-class management team in Europe’s largest and most dynamic media and communications market. After the deal, roughly 80 per cent of Liberty Global’s revenue will come from just five attractive and strong countries – the UK, Germany, Belgium, Switzerland and the Netherlands.”
The announcement coincided with Virgin Media’s earnings result for the final quarter of 2012, in which the firm saw its revenue rise 1.6 per cent to £1.04bn for the quarter, and by 2.7 per cent for the year to reach £2.1bn. Operating income stood at £209m for the quarter and £699m for the year.
“2012 was a year of record cable customer growth, where mainstream demand for superfast broadband and TiVo has led to lower churn and a strong increase in new subscribers,” said Neil Berkett, CEO at Virgin Media. “Combined with growth in our business division, we have delivered solid financial progress.”
Cable Congress will take place from 5 – 7 March 2013 at The Lancaster Hotel, London.
