Virgin Media snapped up in $23.3bn deal

 

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By Stewart Mitchell

Posted on 6 Feb 2013 at 09:50

Virgin Media – the UK's second largest ISP – has been bought by Liberty Global in a deal worth $23.3bn.

The sale was rumoured yesterday, but has now been confirmed by executives. The deal is still subject to regulator and shareholder scrutiny.

It will create what Liberty Global claims will be the world's leading broadband communications company, with 25m customers in 14 countries.

The stock and cash deal is expected to save Liberty Global $180m a year in costs through scale purchases and sharing resources, and the company said it was also attracted by Virgin's innovation, particularly in the mobile and B2B arenas.

"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, 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," he said. "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."

As expected, Virgin Media will continue to run under its own brand. The news comes as Virgin announced in its results that it had added 170,000 new customers in the last year, taking its total to 4.47m.

As part of the deal, Liberty Global will set up a UK company for its operations in Europe, although the company's head office remains in the US. The company will remain listed in the US on the NASDAQ, although Liberty may consider a European listing once the sale has gone through.