Liberty Global, a U.S. based cable company, is buying Virgin Media in a stock and cash deal worth $23.3 billion. The price per share that Liberty is paying reflects a 24% premium of Virgin Media’s closing share price on February 4th.
Being backed by a large company will enable Virgin Media to effectively compete against News Corporation subsidiary BSkyB. Virgin Media has around 4.9 million subscribers and BSkyB has 10.7 million.
The two companies are expected to save $180 million annually from the deal based on procurement of network equipment and IT contracts. Libery Global will be moving their headquarters from Delaware to the United Kingdom and will become a subsidiary of a new U.K. holding company. The deal is subject to regulatory and shareholder approval.
[Source: WSJ via The Verge]