Liberty Global, Telefonica Receive UK Regulatory Approval for Virgin Media/O2 Joint Venture
Transaction set to close on June 1
Liberty Global said it has received final regulatory approval for the 50-50 joint venture to combine its Virgin Media unit with Telefonica’s O2 business from the U.K . Competition & Markets Authority, clearing the path for the June 1 completion of the deal.
CMA approval was the final regulatory hurdle for the deal to be completed. Liberty Global and Spain’s Telefonica first proposed the transaction, which would combine Virgin Media’s broadband internet business with Telefonica’s mobile operations, last May, creating an entity valued at about $38 billion. The combined companies are expected to create a stronger competitor in the U.K. fixed and mobile markets, supporting the expansion of Virgin Media’s giga-ready network and O2’s 5G mobile deployment. The joint venture is expected to deliver about £6.2 billion in synergies and have combined revenue of about £11 billion.
Also Read: Liberty Global Looking at Possible Mobile Deals in Ireland, Poland
The two companies named Virgin Media CEO Lutz Schüler and O2 chief financial officer Patricia Cobian as CEO and CFO, respectively, of the combined company last month.
In a joint statement, Liberty Global CEO Mike Fries and Telefonica CEO José Maria Alvarez-Pallete called the deal “a watershed moment in the history of telecommunications in the UK as we are now cleared to bring real choice where it hasn’t existed before, while investing in fiber and 5G that the UK needs to thrive. We thank the CMA for conducting a thorough and efficient review. Lutz and Patricia are now set to take the reins and launch a national connectivity champion that will connect more people, ignite more businesses back to growth and power more communities for the greater good.”
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Mike Farrell is senior content producer, finance for Multichannel News/B+C, covering finance, operations and M&A at cable operators and networks across the industry. He joined Multichannel News in September 1998 and has written about major deals and top players in the business ever since. He also writes the On The Money blog, offering deeper dives into a wide variety of topics including, retransmission consent, regional sports networks,and streaming video. In 2015 he won the Jesse H. Neal Award for Best Profile, an in-depth look at the Syfy Network’s Sharknado franchise and its impact on the industry.