Politics 6 February 2013 Five questions answered on the sale of Virgin Media to Liberty Global Birth of the world’s biggest broadband company. Sign up for our weekly email * Print HTML Today it has been announced that Liberty Global will buy Richard Branson’s Virgin Media. We answer five questions on the two companies impending merger which will create the world’s biggest broadband company. What is Liberty Global? Liberty Global is an international media company and one of the largest broadband providers outside the US, operating in 13 countries, including Germany and Belgium. John Malone is the company’s chairman who has had a long standing rivalry with Rupert Murdoch, who he clashed with in 2001 when News Corp and Liberty Global vied for control of DirecTV Group, the largest US satellite TV broadcaster. How much has Liberty Global agreed to buy Virgin Media for? In a cash and stock deal the company will pay $23.3bn (£15bn) to the UK Virgin Media company. Shareholders in Virgin Media will recieve $47.87 a share, with $17.50 in cash and the rest in Liberty Global shares. As part of that deal Sir Richard Branson retains a 3 per cent stake in the company, which has a 30-year brand licensing agreement with his Virgin Group. The merger is subject to shareholder and regulatory approvals. How does the deal fit into the wider context of the broadband/ pay-TV industry? The merger will create the world’s biggest broadband company, with 25 million customers in 14 countries, and puts Malone in direct rivalry with Rupert Murdoch, whose media empire owns 39 per cent of BSkyB. The merged company will also be the second biggest pay-TV business after BSkyB in the UK. Virgin Media was originally created from the merger of NTL and Telewest, and Sir Richard Branson's Virgin Mobile in 2006. It is thought that Liberty Global will keep the Virgin Media branding. What has Liberty Global said about its merger with Virgin Media? Mike Fries, President and CEO of Liberty Global, in a press release statement said: “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. “After the deal, roughly 80 per cent 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.” What has Virgin Media representatives said? Virgin Media CEO Neil Berkett said: “Over the past six years, Virgin Media has transformed the digital experience of millions of customers, catalyzed a deep-rooted change in the UK’s digital landscape and delivered impressive growth and returns for our shareholders. I’m confident that this deal will help us to build on this legacy. “Virgin Media and Liberty Global have a shared ambition, focus on operational excellence and commitment to driving shareholder value. The combined company will be able to grow faster and deliver enhanced returns by capitalizing on the exciting opportunities that the digital revolution presents, both in the UK and across Europe.” › America gears up for crisis, again Photograph: Getty Images Heidi Vella is a features writer for Nridigital.com Subscribe from just £1 per issue More Related articles Diversify your income in increasingly concentrated UK markets How Brexit will affect boob jobs, hip replacements and other medical devices What happens when the European Medicines Agency leaves the UK?