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In an enormous deal funded by both cash and stock, U.S-based Liberty Global has announced the purchase of Virgin Media for a hefty $23.3 billion. When combined, Liberty Global and Virgin Media will be home to roughly 25 million subscribers across 14 countries. By comparison, Comcast -- the largest cable operator in the U.S. -- services just under 19 million customers.
The company claims the merger will make it the largest broadband company in the world -- a bold claim which GigaOm notes is somewhat dubious. There is little doubt, however, that it would be one of the largest though.
It's also worth noting that the deal is still subject to regulatory approval, although there are no signs of the merger being halted. Virgin Media itself is the product of three companies who merged in 2006: Telewest, NTL and Virgin Mobile.
Liberty Global says about 80 percent of its revenue will be generated by five "attractive and strong" European countries, namely Germany, U.K, Belgium, Switzerland and the Netherlands. There, its leading competitor in the pay-TV arena will likely be Rupert Murdoch's BSkyB which currently boasts nearly 11 million customers.
With its new-found focus on European markets, Liberty Global says it will redomicile from Delaware to the U.K. However, the company's headquarters and primary offices will remain in their current locations, making its purported "relocation" more of a logical than physical endeavor.
Virgin shareholders will receive $17.50 in cash, 0.2582 Liberty Global Series A shares and 0.1928 Liberty Global Series C shares for each Virgin Media share they own. This offer gives Virgin Media shareholders a roughly 25 percent premium over the company's trading value on Tuesday.
Virgin Group founder Sir Richard Branson said: "This deal is good news for the company, its customers and our people.". Branson holds a 2% stake in Virgin Media worth roughly $316 million.
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