The cash and stock deal is valued at $47.87 per share offer, extending Liberty Global’s reach to over 25 million customers, and cementing its position as Europe’s leading cable operator.
As part of the acquisition, Liberty Global will redomicile from Delaware to the UK by becoming a subsidiary of a new holding company, a UK plc. Liberty Global’s current headquarters and other principal offices will remain in place.
Liberty’s content arm Chellomedia is already based in south-west London.
Liberty Global will be listed on NASDAQ and the existing board will continue to run the company with the addition of one Virgin Media director. A European listing is also under consideration.
Mike Fries, president and CEO of Liberty Global, said: “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. Virgin Media will add significant scale and a first-class management team in Europe’s largest and most dynamic media and communications market”.
Once the deal is approved the majority of Liberty Global’s revenues will come from five countries; the UK, Germany, Switzerland, the Netherlands, and Belgium, where Liberty is currently in a tussle to take full control of the Telenet business.
Liberty Global also controls the vast majority of cable networks in the Republic of Ireland.
The Virgin brand will be maintained in the UK, rather than taking the UPC moniker used by Liberty Global on the continent.
Virgin Media CEO Neil Berkett said: ‘Over the past six years, Virgin Media has transformed the digital experience of millions of customers, catalyzed a deep-rooted change in the UK’s digital landscape and delivered impressive growth and returns for our shareholders. I’m confident that this deal will help us to build on this legacy. Virgin Media and Liberty Global have a shared ambition, focus on operational excellence and commitment to driving shareholder value.”
Virgin Media was created in February 2007 from NTL and Telewest, the final move in the consolidation of UK cable.
NTL was established in 1991 as an investment vehicle under the name International Cabletel. In 1996 it acquired National Transcommunications Limited (NTL), which had been formed out of the old Independent Broadcasting Authority engineering division and included the transmission business now known as Arqiva.
Telewest traced its routes back to 1984 and the United Artists cable network. It took on the Telewest moniker after the 1991 merger with US West (a US telco bought in 2000 by AT&T).
As of September 30, 2012, Virgin had 4,851,000 consumer cable customers.