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U.S. cable giant Liberty Global has agreed to purchase hot U.K. cable and broadband provider Virgin Media in a $23.3 billion cash-and-stock deal, the two companies announced this morning.
The consolidation of these two companies, if approved by regulators, will create a company with 25 million customers across 14 countries. That would make it the largest cable and broadband company in the world outside of China.
Liberty Global expects that the new entity will become a powerhouse in offering digital TV, broadband and telephone services to homes and businesses. However, Virgin Media will keep its name and brand.
“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,” Mike Fries, President and CEO of Liberty Global, said in a statement. “After the deal, roughly 80% of Liberty Global’s revenue will come from just five attractive and strong countries — the UK, Germany, Belgium, Switzerland and the Netherlands.”
The deal is so big that Liberty Global will “relocate” from Delaware to the U.K., but it will still retain its U.S. headquarters. Liberty Global will continue to be listed on the Nasdaq stock exchange but it might also add a listing to a European exchange too.
Under the agreement, Virgin Media shareholders will get $17.50 in cash, 0.2582 Liberty Global Series A shares, and 0.1928 Liberty Global Series C shares for each Virgin Media share they hold.
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