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Liberty Global acquisition may free Virgin Media to increase competition
Wednesday 06 February 2013 09:14:41 by Andrew Ferguson

The speed at which the boards have approved the acquisition of Virgin Media by Liberty Global that has numerous cable operations across Europe and the Americas will be a surprise to many, but more likely this is something that has been happening behind closed doors for some time.

The deal is valued at $23.3 billion (~£15 billion) and will see very Virgin Media shareholder 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.

"Adding Virgin Media to our large and growing European operations is a natural extension of the value creation strategy we've been successfully using for over seven years. Virgin Media will add significant scale and a first-class management team in Europe's largest and most dynamic media and communications market. After the deal, roughly 80% of Liberty Global's revenue will come from just five attractive and strong countries - the UK, Germany, Belgium, Switzerland and the Netherlands.

Like all of our strategic acquisitions we expect this combination to yield meaningful operating and capex synergies of approximately $180 million per year upon full integration. But just as importantly, Virgin Media's market leading innovation and product expertise, particularly in mobile and B2B, will accelerate our own development of these business segments."

Mike Fries, President and CEO of Liberty Global

Today also sees the Virgin Media fourth quarter figures being published, and Virgin Media saw 169,300 net broadband additions in the year, with 62,700 of these in Q4. The total broadband customer base is 4.47m (4.27m cable and 0.2m on DSL).


Posted by Apilar over 4 years ago
200k on VM DSL? Poor people.
Posted by themanstan over 4 years ago
My take is that, Liberty will simply absorb VM debt, freeing them up to be a truly national competitor to BT. I would think that VM (LG) will then break the magical 51% coverage and expand... it will be interesting to see if OFCOM does enforce SMP at that point on VM.
Posted by undecidedadrian over 4 years ago
I seriously doubt that, I think that VM will have even more debt loaded onto it as a quick cash grab .

It seems that most companies that get taken over by US comapnies get a massive debt loaded onto it rather than absorbed. Look at Manchester United.

This looks like here is the new boss same as the old boss, no new investment and plenty of debt to service.
Posted by ValueforMoney over 4 years ago
Extra $3bn debt to finance the deal. Forget network expansion for a while.
Posted by pcoventry76 over 4 years ago
@ Apilar

No that I think means 200,000 customer not the speed
Posted by otester over 4 years ago
I doubt VM will ever tread into SMP territory, I'd expect them to improve the network they have at the moment so they can beat BT.
Posted by AndrueC over 4 years ago
I doubt Liberty will use this to clear down VM debt. Apparently Liberty already has more than it's fair share of debt. One wag suggested to me that that's where the true synergy lies experts in over leveraging :)
Posted by LT38 over 4 years ago
So i bet nothing will be done for those of us still suffering VM lies regarding getting there crap network fixed. This will just be another fly in the already bad ointment, More stress for us long term sufferers
Posted by LT38 over 4 years ago
also these figures are crap its about time companies asked the customers instead of taking the so called stats the providers offer up.

Just because the stats say 4 million people with superfast broadband it does not mean the actual customer is getting that speed. 2000 people in this area alone all sharing the same 2 lines so if 1 is getting bad speed you can bet all are. Wake up OFCOM smell the bacon and do propper surveys of the users not the suppliers
Posted by ElBobbo over 4 years ago
You're getting "bad speed" so everyone must be?

VM's got some four million plus customers. If they were all getting terrible connections, they'd have probably left. VM's done well in the independent samknows/ofcom average speed ratings, so I think you're less representative of the whole as you'd think.

My VM gives exactly what it says on the tin; 12MB/s day and night.
Posted by pcoventry76 over 4 years ago
You clearly have not looked at the forums recently. I am one of those who have gone just as you have suggested.
Posted by callum9999 over 4 years ago
Name ONE single ISP that doesn't have a proportion of customers moaning about a bad network/poor speeds.

It's a fact that Virgin Media provide amongst the best speeds in the country (usually coming first)and it's about time people started to realise that just because they have issues - doesn't mean that loads of other people do.
Posted by csage over 4 years ago
Just to add my 2 cents, I have just left VM after a 18 month struggle of 30-40% packet loss issues with my so called 100mbps broadband connection. I am unable to use my VM "high speed" connection between the hours of 6pm and 12am. I have left and "upgraded" to a 6mbps adsl line as at least it works! Count yourself lucky if you have a VM connection that works, the reason why many have not left VM is like myself they don't have another option.
Posted by otester over 4 years ago

Posted by callum9999 over 4 years ago

What exactly is that meant to show me? There isn't a single ISP on the list with 10 stars.

Posted by otester over 4 years ago

No ISP is retard-proof.
Posted by ElBobbo over 4 years ago
So anyone who has a problem with those ISPs is a retard? That's a great argument.
Posted by otester over 4 years ago

90% of the time, yes.
Posted by leexgx over 4 years ago
the real issue is norm only at the local level (overloaded upstreams From the local FTTC node) why Virgin customers mone more (like my self) is due to the packet loss due to the way Virgin network works when the Upstream from the FTTC cab to the house (DOCSIS) gets to overloaded

the Fiber link to the Node is NOT overloaded on virgin normally its the DOCSIS upstream that is over utilised (you got to think of DOCSIS as Wifi to many users on it it just does not work that limit seems to be around 70% when it starts to fall apart and drop packets)
Posted by leexgx over 4 years ago
on ADSL 2 issues are norm the problem the backhaul is to small so the QOS in the exchange lowers the total speed to each ADSL line to keep packet loss away (norm happens on None 21cn exchanges) or you have an Faulty line that BT norm do fix (where as Virgin ignore it and send you and superhub and upgrade your speed and make the problem worse the more users they upgrade so degrades the network more on the local node)
Posted by leexgx over 4 years ago
soon as BT FTTC comes around here i have at least 7 providers to pick from, i not get full 80mb speeds but my ping will never be higher then 40ms and no packet loss
(ADSL is not really an option where i am due to distance from he exchange but i guess sub 1mb ADSL line would be good enough for playing games on where as at peak time VM is Not due to packet loss)
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