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 4 most unfortunate Nazi-EU comparisons made by Brexiteers

Don't mention the war.

On Tuesday morning, the Prime Minister Theresa May made her overtures to Europe. Britain wanted to be, she declared “the best friend and neighbour to our European partners”.

But on the other side of the world, her Foreign secretary was stirring up trouble. Boris Johnson, on a trade mission to India, said of the French President:

“If Mr Hollande wants to administer punishment beatings to anybody who seeks to escape [the EU], in the manner of some World War Two movie, I don't think that is the way forward, and it's not in the interests of our friends and partners.”

His comments were widely condemned, with EU Brexit negotiator Guy Verhofstadt calling them “abhorrent”.

David Davis, the Brexit secretary, then piled in with the declaration: “If we can cope with World War Two, we can cope with this."

But this isn’t the first time the Brexiteers seemed to be under the impression they are part of a historical re-enactment society. Here are some of the others:

1. When Michael Gove compared economist to Nazis

During the EU referendum campaign, when economic organisation after economic organisation predicted a dire financial hangover from Brexit, the arch-Leaver Tory MP is best known for his retort that people “have had enough of experts”.

But Gove also compared economic experts to the Nazi scientists who denounced Albert Einstein in the 1930s, adding “they got 100 German scientists in the pay of the government to say he was wrong”. 

(For the record, the major forecasts came from a mixture of private companies, internationally-based organisations, and charities, as well as the Treasury).

Gove later apologised for his “clumsy” historical analogy. But perhaps his new chum, Donald Trump, took note. In a recent tweet attacking the US intelligence agencies, he demanded: “Are we living in Nazi Germany?”

2. When Leave supporters channelled Basil Fawlty

Drivers in Oxfordshire had their journey interrupted by billboards declaring: “Halt Ze German Advance! Vote Leave”. 

The posters used the same logo as the Vote Leave campaign – although as the outcry spread Vote Leave denied it had anything to do with it. Back in the 1970s, all-Germans-are-Nazi views were already so tired that Fawlty Towers made a whole episode mocking them.

Which is just as well, because the idea of the Nazis achieving their evil empire through tedious regulatory standards directives and co-operation with French socialists is a bunch of bendy bananas.   

3. When Boris Johnson said the EU shared aims with Hitler

Saying that, Boris Johnson (him again) still thinks there’s a comparison to be had. 

In May, Johnson told the Telegraph that while Brussels bureaucrats are using “different methods” to Hitler, they both aim to create a European superstate with Germany at its heart.

Hitler wanted to unite the German-speaking peoples, invade Eastern Europe and enslave its people, and murder the European Jews. He embraced violence and a totalitarian society. 

The European Union was designed to prevent another World War, protect the rights of minorities and smaller nations, and embrace the tedium of day-long meetings about standardised mortgage fact sheets.

Also, as this uncanny Johnson lookalike declared in the Telegraph in 2013, Germany is “wunderbar” and there is “nothing to fear”.

4. When this Ukip candidate quoted Mein Kampf

In 2015, Kim Rose, a Ukip candidate in Southampton, decided to prove his point that the EU was a monstrosity by quoting from a well-known book.

The author recommended that “the best way to take control” over a people was to erode it “by a thousand tine and almost imperceptible reductions”.

Oh, and the book was Mein Kampf, Hitler's erratic, rambling, anti-Semitic pre-internet conspiracy theory. As Rose explained: “My dad’s mother was Jewish. Hitler was evil, I'm just saying the EU is evil as well.”
 

Julia Rampen is the editor of The Staggers, The New Statesman's online rolling politics blog. She was previously deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.