Rupert Murdoch's arch rival buys Virgin Media for £15bn
6th Feb 2013 | 10:24
Expect fierce competition down the line
We smell a fight cooking in the UK broadband market. Virgin Media has just announced it'll be sold to Rupert Murdoch's arch rival, John Malone.
Liberty Global, a cable group owned by Malone, will pay £15 billion in cash and stocks.
The deal will make Virgin Media part of the world's largest broadband company, with 25 million customers in 14 countries, and should help it increase the pace of expansion - making it a greater threat to Sky.
"The combined company will be able to grow faster and deliver enhanced returns by capitalising on the exciting opportunities that the digital revolution presents, both in the UK and across Europe," Neil Berkett, chief executive of Virgin Media, said in a statement.
Virgin Media riding high
This announcement comes at a successful time for Virgin Media. The company announced a 30 per cent rise in operating profit last year, and that it added a record 88,700 customers to its cable business during the 12 months.
It should please its shareholders too, who'll receive $17.50 (£11) in cash per share.
Liberty Global already operates in European countries including Germany and Belgium.
"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," said Mike Fries, chief executive of Liberty Global.
John Malone, the US billionaire who owns Liberty Global, is Rupert Murdoch's arch nemesis, since the two vied for control of DirecTV Group in 2007. So we could see some fierce competition between Virgin Media and Murdoch's Sky in the coming months. Let's hope it means lower broadband prices for us all.