Five questions answered on the sale of Virgin Media to Liberty Global

Birth of the world’s biggest broadband company.

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.”

Photograph: Getty Images

Heidi Vella is a features writer for Nridigital.com

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The hidden joy of charity shops

Mary saw her colleagues at the charity shop every day, but she didn't tell them she was sleeping on the 31 bus.

Camden is a bric-a-brac kind of place – market stalls, blaring music, occasional offers of weed. But the back room of the Sue Ryder charity shop on Parkway is immaculate, with hooped petticoats waiting to be steamed and crockery stacked neatly on the shelves. I’ve come to talk to the shop’s manager, Oya, and one of her volunteers, Mary*, and they are waiting for me with milky tea and chocolate-chip cookies.

Mary is nervous. She is afraid of having her real name printed. “It’s shaming to tell you my story but I believe if I tell people at the right time, good things will happen,” she says. Now in her fifties, she arrived in Britain four years ago from Italy, without friends or savings, having left her husband. The jobcentre gave her an Oyster card and told her to volunteer at a charity shop to improve her English. “So we put her on the tills,” says Oya. “That’s what we do with anyone who gets sent to us to learn English.”

But Mary had a secret. She couldn’t find anywhere to live, so every afternoon, when she finished her shift at the shop, she would go to the jobcentre and laugh and joke with the staff there to cover up the reality that she didn’t have anywhere else to go. When the jobcentre closed, she would ride the 31 bus through the night, from White City to Camden and back again. It was the best way to stay warm. Then, every morning, she would arrive at the shop early, brush her teeth in the staff bathroom and change into fresh clothes – washed in a friend’s hostel room. No one else knew.

The charity Crisis calls people such as Mary “the hidden homeless” and says that it is almost impossible to estimate how many of them there are in Britain today. Most homeless people don’t qualify for accommodation in shelters but eke out their time shuttling between friends’ sofas, insecure rented accommodation, bed and breakfasts or sleeping rough on the streets.

Eventually, the shop manager – Oya’s predecessor – asked Mary what was wrong and her story tumbled out. Between them, with help from the jobcentre staff, Mary found a studio flat and moved from volunteering on the tills to working at a nearby convenience store, where she is now a supervisor. Both she and Oya have to stop to reach for tissues while telling me this story. “Sue Ryder is my family,” says Mary. “Sometimes I want to cry but there are no tears left. And Allah would be angry if I dared to cry now, with all that I have.”

Despite having a paid job, Mary still volunteers at the charity shop on Friday mornings. She leaves at 3pm to work the evening shift at the convenience store. She and Oya are firm friends outside work. Mary brings in home-cooked lasagne for Oya and her daughter – “She says, ‘Eat some tonight, freeze the rest for Ella’” – and Oya invites her round and cooks her Turkish food on Friday nights. “She’ll say working here saved her life,” says Oya. “I’ll say I made a friend for life.”

The reason I’m here is a selfish one. Volunteering for a charity is the perfect antidote to a culture that can often feel mercenary, cynical and ruthlessly individualistic. I wish more people did it. I’m also here because in December, I wrote a piece defending charities from accusations that many do not turn every penny of donations into outlay on their projects. But running charity shops requires upfront investment – on electricity, rent and wages – so it’s too simplistic to demand that all the money they receive should go straight back out of the door.

That article prompted the management of Sue Ryder, which operates 457 shops with 12,000 volunteers, to get in touch and invite me in. Some of their volunteers, like Mary, need to learn English and other skills before they can get a paying job; some are serving prison sentences; others are youngsters sent unwillingly by their schools for work experience. (Jackie, who now manages one of the charity’s shops in Aberdeen, had previously been imprisoned three times.)

Not that everything is rosy in the charity shop back room. Oya says that some people use them as a “dumping ground”. I tell her that I once read a story about a donation of tights that had a used sanitary towel still stuck to the crotch and they nod: “We had that.” Oya is very proud, however, that the store “doesn’t smell like a charity shop”.

As well as providing jobs and raising money, stores such as this one provide a useful social barometer. There are around 9,000 charity shops in the UK and their number rose 30 per cent in the five years following the financial crash of 2007. Since then, the economic downturn has increased trade significantly. Last year at the shop in Camden, the number of donation bags increased by 52 per cent and takings went up by 8 per cent, yielding a net profit of £65,000.

In Camden, close to chichi Mornington Crescent and Primrose Hill, the donations can be eyewateringly expensive (recent finds include a £1,200 clarinet and a £980 Prada handbag), while the cheapest brands stocked are Marks & Spencer and Next. “More people are charity shopping,” says Oya. “And not the people you’d expect. They’re suited and booted. Sometimes they’re famous.” Mention is made of an EastEnders actress spotted in the store.

Because of her work, Oya has been invited to a garden party at Buckingham Palace on 12 June and naturally she is taking Mary. A trip to buy hats is coming up and their enthusiasm is infectious. Here in the back room of a north London charity shop, as the three of us – a Turkish-British Muslim, an Eritrean-Italian Muslim and plain old white agnostic me – drink milky tea, I feel the most British I have all year. These guys really love the Queen. And they love being friends. Stepping out into the sunshine, my overwhelming feeling is: maybe we’re all going to be OK.

*Her name has been changed

Helen Lewis is deputy editor of the New Statesman. She has presented BBC Radio 4’s Week in Westminster and is a regular panellist on BBC1’s Sunday Politics.

This article first appeared in the 19 May 2016 issue of the New Statesman, The Great Huckster