Virgin Media has accepted a $23.3bn takeover by Liberty Global, owned by American cable tycoon John Malone in a deal that threatens to topple Rupert Murdoch’s dominance of pay television in Europe by creating Europe’s largest broadband business.
The takeover ranks as one of the 10 largest cable deals of all time, according to Thomson Reuters. It would make it the largest cable operator in the United Kingdom, as well as taking over Virgin’s home and mobile telephone businesses, creating what they claim is “the world’s leading broadband communications company” with 25 million customers across 14 countries.
By comparison, Comcast in the US has 18.7 million subscribers. The deal gives Liberty Global access to Europe’s largest cable market and pits Liberty Global’s owner, American billionaire John Malone, against Rupert Murdoch, the biggest shareholder in Britain’s pay-TV provider British Sky Broadcasting.
After the deal, roughly 80% of Liberty Global’s revenue will come from just five countries – the UK, Germany, Belgium, Switzerland and the Netherlands. The newly integrated Liberty Global, a European cable giant, will focus on European triple-play with broadband, telephony and digital TV while also pushing mobility and B2B products.
Both Virgin and Sky decided to stay out of bidding in the UK’s current 4G spectrum auctions but have extensive Wi-Fi activities. Virgin Media, is looking to build out Wi-Fi to its TV and broadband services. Virgin would build out its network by placing broadband routers in secure public locations, with access free to Virgin customers. Non-Virgin subscribers would be able to use the Wi-Fi networks for a fee.
Competitor Rupert Murdoch got a go-ahead to take over the remaining 61% of British Sky Broadcasting (BSkyB) in 2011. News Corporation is the world’s second-largest media group as of 2011, and it earned 33.706 billion in total revenues in 2012.
Virgin Mobile USA is a wholly owned subsidiary of Sprint Nextel Corporation. It provides nationwide, prepaid, wireless services to customers in the United States under the Virgin Mobile and Assurance Wireless brands.
According to the 2012 Fortune 500 list, The Walt Disney Company is America’s largest media conglomerate in terms of revenue, with News Corporation, Time Warner, Viacom, and CBS Corporation completing the top 5. Other major players are Comcast’s NBCUniversal division, and Sony Corporation of America.