Liberty Global Buys UK's Virgin Media for $23.3 Billion
Deal will create the world's largest broadband provider.
Broadband company Liberty Global has announced plans to purchase UK broadband provider Virgin Media. The deal, announced today, is valued at approximately $23.3 billion or almost £15 billion. The deal will create the world's largest broadband company, with 25 million customers across 14 countries around the world.
Liberty Global said today that under the terms of the agreement, 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 of their Virgin Media shares. Based on the price of Liberty Global's Series A and Series C shares, this implies a price of $47.87 per Virgin Media share. As of February 4, Liberty Global’s Series A share price was $69.46 and their Series C share price was $64.50.
"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% of Liberty Global's revenue will come from just five
attractive and strong countries - the UK, Germany, Belgium, Switzerland and the Netherlands."
No word on whether there will be any layoffs as a result of the merger, but Virgin Media will continue to operate under the Virgin Media brand in the UK. Additionally, Liberty Global plans to redomicile from Delaware to the United Kingdom by becoming a subsidiary of a new holding company, a UK plc. Its current headquarters and other principal offices will remain in place. One Virgin Media director will sit on the Liberty Global board, and that person will be named prior to the deal's closing in the second quarter of this year.