Takeover by US cable tycoon John Malone's company creates Europe's largest broadband business
Virgin Media has accepted a $23.3bn (£15bn) takeover by American cable tycoon John Malone's Liberty Global in a deal that threatens to topple Rupert Murdoch's dominance of pay television by creating Europe's largest broadband business.
The new company will have its headquarters in the UK, and serve 25m customers in 14 countries including Germany, Belgium, Switzerland and the Netherlands. Virgin will retain its brand, but chief executive Neil Berkett will step down when the merger concludes.
The cash and shares offer, announced as the London Stock Exchange opened on Wednesday, values Virgin at $47.87 per share, reflecting a 24% premium to the closing price on Monday before news of the deal emerged. Virgin investors will receive $17.50 in cash and own 36% of Liberty's shares once the deal is complete.
In acquiring Virgin, Malone is fulfilling a decade-long ambition which began with an attempt to bring an end to years of losses in the UK cable business by merging the two dominant players, NTL and Telewest. His bid failed, but the two companies eventually merged under their own steam to form Virgin Media, with the company reporting its first profit last year.
Welcoming Liberty's offer, Berkett said the combined company would be a "powerful and disruptive challenger to incumbent operators and a distinctive voice in the ongoing policy debate".
Liberty said it would transfer its headquarters from Delaware to the UK by forming a British plc, and that it "may look to implement a European listing".
"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% of Liberty Global's revenue will come from just five attractive and strong countries – the UK, Germany, Belgium, Switzerland and the Netherlands," said Mike Fries, chief executive of Liberty.
He brushed aside speculation that Liberty might bid for sports rights or look to buy a content producer like ITV, saying: "We don't see any reason why Virgin Media needs to compete with Sky for that premium content."
Liberty will boost investment in the speed of Virgin's fibre-optic network, but is unlikely to seek a major expansion to its UK footprint, which covers 13m homes and serves nearly 5m customers.
Its European operations, however, will expand their activities in business telecoms and mobile phones, by using Virgin's expertise in these areas. The company acquired its name through a merger with Sir Richard Branson's Virgin Mobile and still pays the British entrepreneur £10m a year in licence fees. Reported by guardian.co.uk 12 hours ago.
Virgin Media has accepted a $23.3bn (£15bn) takeover by American cable tycoon John Malone's Liberty Global in a deal that threatens to topple Rupert Murdoch's dominance of pay television by creating Europe's largest broadband business.
The new company will have its headquarters in the UK, and serve 25m customers in 14 countries including Germany, Belgium, Switzerland and the Netherlands. Virgin will retain its brand, but chief executive Neil Berkett will step down when the merger concludes.
The cash and shares offer, announced as the London Stock Exchange opened on Wednesday, values Virgin at $47.87 per share, reflecting a 24% premium to the closing price on Monday before news of the deal emerged. Virgin investors will receive $17.50 in cash and own 36% of Liberty's shares once the deal is complete.
In acquiring Virgin, Malone is fulfilling a decade-long ambition which began with an attempt to bring an end to years of losses in the UK cable business by merging the two dominant players, NTL and Telewest. His bid failed, but the two companies eventually merged under their own steam to form Virgin Media, with the company reporting its first profit last year.
Welcoming Liberty's offer, Berkett said the combined company would be a "powerful and disruptive challenger to incumbent operators and a distinctive voice in the ongoing policy debate".
Liberty said it would transfer its headquarters from Delaware to the UK by forming a British plc, and that it "may look to implement a European listing".
"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% of Liberty Global's revenue will come from just five attractive and strong countries – the UK, Germany, Belgium, Switzerland and the Netherlands," said Mike Fries, chief executive of Liberty.
He brushed aside speculation that Liberty might bid for sports rights or look to buy a content producer like ITV, saying: "We don't see any reason why Virgin Media needs to compete with Sky for that premium content."
Liberty will boost investment in the speed of Virgin's fibre-optic network, but is unlikely to seek a major expansion to its UK footprint, which covers 13m homes and serves nearly 5m customers.
Its European operations, however, will expand their activities in business telecoms and mobile phones, by using Virgin's expertise in these areas. The company acquired its name through a merger with Sir Richard Branson's Virgin Mobile and still pays the British entrepreneur £10m a year in licence fees. Reported by guardian.co.uk 12 hours ago.