Virgin Liberty deal set to go ahead, at $23.3bn

Liberty Global shareholders approved the acquisition of Virgin Media, valued at $23.3bn. Liberty held a special shareholders meeting in the beginning of June to vote on the deal. Virgin Media has announced it will be delisting its shares on June 10 in order to complete the merger.

“The transactions contemplated by the merger agreement are expected to be completed on or about June 7,” Virgin Media has said in a statement.

“This is one more brick in the wall of scale in Europe, which will ultimately pay real dividends,” says John Malone, Liberty Global chairman.

Liberty CEO Mike Fries has said that his company does no view the Virgin takeover as a “turnaround” story, but rather that he hopes to “build scale” and grow the business. It has been reported that the after the merger the company will be the biggest broadband provider in the world with over 25 million customers.

The European Commission cleared the deal earlier in the year. It said in a statement there were no concerns over competition as both companies operated cable networks in different countries in Europe. It also cited its limited market position in the cable television market in Britain and Ireland as another mitigating factor. It is expected that the deal will ignite a race between the new Virgin Media group and Rupert Murdoch’s BskyB, currently the market leader in broadband in the UK.

“The merged entity is unlikely to shut out competing Pay TV retailers by withholding its TV channels from them, given its very limited presence in the wholesale supply of TV channels and the incentive to license its TV channels as broadly as possible,” the EC said in a statement.

“Similarly, it is unlikely that the merged entity would shut out competing TV channel broadcasters from access to the retail Pay TV market, given the number of alternative distribution platforms to Virgin Media’s cable network, and the importance of offering a large variety of TV channels in order to attract Pay TV subscribers.”

Liberty Global has previously announced that it had appointed former New International Tom Mockeridge as the new chief executive of Virgin Media after the take over. He will report to Fries, while current Virgin Media boss Neil Berkett will step down. “Thanks to the incredible energy of its employees and the loyalty of its customers, Virgin Media has become the UK’s leading broadband communications company and has developed an immensely powerful media brand,” says Mockeridge.

It has been estimated that Virgin Media founder Richard Branson will walk away with over $300m from his three percent share.