The status of News Corp. (owners of properties such as Fox, Sky, The Sun, and Daily Mail) as the world’s leading media company is expected to be strongly challenged, after fellow American giants Liberty Global announced a £10.22b ($16b) buy-out of UK telecommunications specialists Virgin Media.
The purchase (which will see Virgin Media retain their brand name and some ties with the parent conglomerate owned by Sir Richard Branston) adds to the range of companies already owned by Liberty, including English content distributors Chellomedia, and multi-national telecommunications operators UPC, amongst others in a key European market for the business.
Neil Berkett, CEO of Virgin Media, said of the developments: “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.”
Liberty Global president/CEO Mike Fries added of the acquisition: “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. Virgin Media will add significant scale and a first-class management team in Europe’s largest and most dynamic media and communications market. 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.”
If the buy-out is completed (following approvals from regulatory bodies and the shareholders of both parties), and follows the road to the expected closing in Q2 2013, it would make Liberty the 2nd-biggest media corporation in the world, with only News Corp ahead of them in terms of company value.
While Virgin Media not being owned by Virgin might be a confusing prospect for customers that choose to look deeper than the name, will the new change give ‘Liberty’ to the cable TV provider (who are naturally second in the UK market to satellite broadcasters Sky, a News Corp.-owned company)?