Virgin Media sold in £10bn American deal
11:56am Wednesday 6th February 2013 in News
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).