Virgin Media sold in £10bn American deal

The Bolton News: Virgin Media sold in £10bn American deal Virgin Media sold in £10bn American deal

Virgin Media has been bought by a US cable giant in a takeover deal worth more than £10 billion.

The company - which was formed from the merger of cable TV firm NTL and Virgin Mobile - has 48,000 customers in Bolton, offering them telephone and television services via high speed cable as well as 100Mb broadband.

The buyout by US cable giant Liberty Global will pit Colorado-based billionaire investor John Malone in direct competition with BSkyB's 39 per cent stakeholder Rupert Murdoch. The American firm has already vowed to become a "disruptive challenger" in the pay-TV market.

Malone's Liberty empire will now span 14 countries and have 25 million customers. Virgin Media is Britain's second biggest pay-TV company.

Virgin Media employs 14,000 people in the UK, including at offices and call centres in Manchester, Bradford, Swansea, Birmingham, London and Glasgow.

No customer-facing jobs are expected to go under plans by Liberty Global to save 180 million US dollars (£115 million) across its business.

Virgin Media chief executive Neil Berkett, who will leave the company following the completion of the deal, today said Virgin would become a "disruptive challenger" to its rivals, which include BT and Sky in the UK, but would not be competing for entertainment and sports rights such as Premier League football.

Mr Berkett said: "The combined company will be able to grow faster and deliver enhanced returns by capitalising on the exciting opportunities that the digital revolution presents, both in the UK and across Europe."

Liberty Global has pay-TV operations around the world and is the largest cable operator in most of its 11 European markets, including Ireland.

After the deal, roughly 80% of Liberty Global's revenue will come from five countries - the UK, Germany, Belgium, Switzerland and the Netherlands.

In its full year results today, Virgin Media reported the net addition of a record 88,700 cable customers last year, up from 5,500 the previous year. In the last three months of last year it secured 62,700 new broadband customers, compared with 30,000 the previous year.

Operating income was £699.1 million in the year to December 31, up from £540.2 million the previous year, having seen a 2.7% jump in revenues to £4.1 billion.

Liberty Global said the stock and cash merger, which is subject to shareholder approval, was valued at approximately 23.3 billion US dollars (£15 billion) when including debt. The deal values New York-listed Virgin's shares at 16 billion US dollars (£10.1 billion).

Comments (7)

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12:28pm Wed 6 Feb 13

MarkAllRead says...

Great, more money leaving the UK to fill the USA's coffers. Why are we allowing this?
Great, more money leaving the UK to fill the USA's coffers. Why are we allowing this? MarkAllRead
  • Score: 1

12:29pm Wed 6 Feb 13

boltoncity says...

excellent news . hope branson did well from the sale and its about time sky got some serious competition!
excellent news . hope branson did well from the sale and its about time sky got some serious competition! boltoncity
  • Score: -1

12:44pm Wed 6 Feb 13

boltonnut says...

Another virgin been sacraficed to the financial gods.
Another virgin been sacraficed to the financial gods. boltonnut
  • Score: 1

12:44pm Wed 6 Feb 13

raggadaddy says...

According to The Guardian, Branson's Virgin Group owns just under 3% of the company and receives approx £10 million a year as a royalty payment. If the deal goes his stake is worth approx $380m
According to The Guardian, Branson's Virgin Group owns just under 3% of the company and receives approx £10 million a year as a royalty payment. If the deal goes his stake is worth approx $380m raggadaddy
  • Score: -1

2:11pm Wed 6 Feb 13

Beyond News Forum says...

Wish it was Comcast! Excellent cable carrier. When in the states Comcast had such superior customer service I often thought their engineers worked at a gigabyte.
Wish it was Comcast! Excellent cable carrier. When in the states Comcast had such superior customer service I often thought their engineers worked at a gigabyte. Beyond News Forum
  • Score: 0

5:40pm Wed 6 Feb 13

Wigan Trotter says...

Another British company gone west!
Another British company gone west! Wigan Trotter
  • Score: 0

9:11pm Wed 6 Feb 13

BWFC71 says...

Wigan Trotter wrote:
Another British company gone west!
Are you sure it was British? Virgin only held less than 5% of the companies shares and received an annual loyalty fee for the use of the Virgin brand. Rest of the shares are held by various investment companies which are predominantly based overseas!

The Company that has bought VM already has a presence in Europe as they own UPC Ireland and UPC Nederland, although their customer service has a lot to be desired!!!

Basically its a foreign company that has been bought by a foreign company. Virgin was previously called NTL and NYNEX which were American companies!!!
[quote][p][bold]Wigan Trotter[/bold] wrote: Another British company gone west![/p][/quote]Are you sure it was British? Virgin only held less than 5% of the companies shares and received an annual loyalty fee for the use of the Virgin brand. Rest of the shares are held by various investment companies which are predominantly based overseas! The Company that has bought VM already has a presence in Europe as they own UPC Ireland and UPC Nederland, although their customer service has a lot to be desired!!! Basically its a foreign company that has been bought by a foreign company. Virgin was previously called NTL and NYNEX which were American companies!!! BWFC71
  • Score: 0

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