British cable service provider Virgin Media
has been acquired by Liberty Global
. The deal, worth $23.3 billion in cash and stock, gives Liberty a bigger stake in European businesses, as well as providing both companies the chance to save around $180 million per year after regulatory and shareholder approval and the acquisition closes.
Virgin Media will add 4.9 million subscribers to Liberty's books, giving the new company a combined reach of 25 million customers spread across 14 countries, according to the BBC
. In a separate announcement, Virgin Media claimed to have reported an operating profit of £699.1 million ($1.1 billion) last year, an increase of 30 percent, as well as attracting 88,700 new cable customers. The deal will "be able to grow faster and deliver enhanced returns by capitalizing on the exciting opportunities that the digital revolution presents," according to Virgin Media chief executive Neil Berkett.
Formed in 2006 through the merger of Virgin Mobile, NTL, and Telewest, Virgin Media provides cable TV services as well as cable Internet, with some regions getting speeds as high as 100Mbps
. It also provides customers with on-demand services and DVR features through it's TiVo
set-top box, and also provided London Underground with free Wi-Fi
services during the 2012 Summer Olympics.
The deal will also provide Virgin Media a stronger position against the current leader of pay-TV in the UK, BskyB. The Rupert Murdoch-controlled group currently provides service to 10.7 million customers in the UK, with market dominance lucrative areas such as sports broadcasting and movie packages. The Libery acquisition is said by the company to offer customers "enhanced bundled and premium services," as well as an accelerated growth.
The name of the service in the UK is likely to remain the same for some time, as the company has a 30-year brand licensing agreement with the Virgin Group. Sir Richard Branson, Virgin founder, will retain a 3-percent stake in the company.