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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I believe only Yvette Cooper has the breadth of support to beat Jeremy Corbyn

All the recent polling suggests Andy Burnham is losing more votes than anyone else to Jeremy Corbyn, says Diana Johnson MP.

Tom Blenkinsop MP on the New Statesman website today says he is giving his second preference to Andy Burnham as he thinks that Andy has the best chance of beating Jeremy.

This is on the basis that if Yvette goes out first all her second preferences will swing behind Andy, whereas if Andy goes out first then his second preferences, due to the broad alliance he has created behind his campaign, will all or largely switch to the other male candidate, Jeremy.

Let's take a deep breath and try and think through what will be the effect of preferential voting in the Labour leadership.

First of all, it is very difficult to know how second preferences will switch. From my telephone canvassing there is some rather interesting voting going on, but I don't accept that Tom’s analysis is correct. I have certainly picked up growing support for Yvette in recent weeks.

In fact you can argue the reverse of Tom’s analysis is true – Andy has moved further away from the centre and, as a result, his pitch to those like Tom who are supporting Liz first is now narrower. As a result, Yvette is more likely to pick up those second preferences.

Stats from the Yvette For Labour team show Yvette picking up the majority of second preferences from all candidates – from the Progress wing supporting Liz to the softer left fans of Jeremy – and Andy's supporters too. Their figures show many undecideds opting for Yvette as their first preference, as well as others choosing to switch their first preference to Yvette from one of the other candidates. It's for this reason I still believe only Yvette has the breadth of support to beat Jeremy and then to go on to win in 2020.

It's interesting that Andy has not been willing to make it clear that second preferences should go to Yvette or Liz. Yvette has been very clear that she would encourage second preferences to be for Andy or Liz.

Having watched Andy on Sky's Murnaghan show this morning, he categorically states that Labour will not get beyond first base with the electorate at a general election if we are not economically credible and that fundamentally Jeremy's economic plans do not add up. So, I am unsure why Andy is so unwilling to be clear on second preferences.

All the recent polling suggests Andy is losing more votes than anyone else to Jeremy. He trails fourth in London – where a huge proportion of our electorate is based.

So I would urge Tom to reflect more widely on who is best placed to provide the strongest opposition to the Tories, appeal to the widest group of voters and reach out to the communities we need to win back. I believe that this has to be Yvette.

The Newsnight focus group a few days ago showed that Yvette is best placed to win back those former Labour voters we will need in 2020.

Labour will pay a massive price if we ignore this.

Diana Johnson is the Labour MP for Hull North.