Chairman of Liberty Media John Malone

Virgin pledge after US takeover

Virgin Media has agreed to a £10 billion takeover by US cable giant Liberty Global.

The deal marks a breakthrough into the UK market for Colorado-based billionaire investor John Malone, whose Liberty empire will span 14 countries and have 25 million customers after taking on Britain's second biggest pay-TV company.

It will make him a direct rival of Rupert Murdoch's News Corporation, the company which owns 39 per cent of pay-TV market leader BSkyB and was once 18 per cent owned by Mr Malone.

Virgin Media, which was created 6 years ago out of the mergers of NTL, Telewest and Virgin Mobile, employs 14,000 people in the UK, including at offices and call centres in Swansea, Birmingham, London, Glasgow, Manchester and Bradford.

No customer-facing jobs are expected to go under plans by Liberty Global to save $180 million (£115 million) across its business.

Virgin Media chief executive Neil Berkett, who will leave the company following the completion of the deal, today said Virgin would become a "disruptive challenger" to its rivals, which include BT and Sky in the UK, but would not be competing for entertainment and sports rights such as Premier League football.

Berkett said: "The combined company will be able to grow faster and deliver enhanced returns by capitalising on the exciting opportunities that the digital revolution presents, both in the UK and across Europe."

Liberty Global has pay-TV operations around the world and is the largest cable operator in most of its 11 European markets, including Ireland.

After the deal, roughly 80 per cent of Liberty Global's revenue will come from five countries - the UK, Germany, Belgium, Switzerland and the Netherlands.

In its full year results today, Virgin Media reported the net addition of a record 88,700 cable customers last year, up from 5,500 the previous year. 

In the last three months of last year it secured 62,700 new broadband customers, compared with 30,000 the previous year.

Operating income was £699.1 million in the year to December 31, up from £540.2 million the previous year, having seen a 2.7 per cent jump in revenues to £4.1 billion.

Liberty Global said the stock and cash merger, which is subject to shareholder approval, was valued at approximately $23.3 billion (£15 billion) when including debt.

The deal values New York-listed Virgin's shares at $16 billion (£10.1 billion)

Malone began his career in 1963, after graduating from Yale University, and went on to make his fortune through a series of deals credited with transforming the US cable industry.

Born to an engineer in in Milford, Connecticut, he set out in his father's footsteps, opting to study electrical engineering and economics.

The degree choice served him well and he took a job in research and development at American telecommunications firm AT&T Corporation.

Two decades of hard grind saw him make something of a name for himself - and rake in a fortune as he built up Denver-based firm Tele-Communications Inc in the 1980s.

He became director of the US National Cable Television Association (NCTA) and went on to receive the NCTA Vanguard Award in 1983, one of the highest honours in the US cable television industry.

He later sold TCI for a reported $54 billion (£35 billion).

But it has not always been an easy ride.

The media magnate was forced to watch his company's stock price nose-dive when customers defected to satellite TV and debts mounted.

Famed for speaking his mind and taking no prisoners, he was reportedly branded the Darth Vader of the information age by former American vice president Al Gore because of his apparently brutal approach to business.

However, the businessman and philanthropist - who is worth £5.6 billion according to the Forbes rich list - emerged on top at Liberty Global.

The television programming arm of TCI now runs operations in 13 countries and has helped cement Mr Malone's position as the so-called King of Cable.

The takeover of Virgin Media pits him directly against Murdoch whose News Corporation - which was once 18per cent owned by Mr Malone - owns 39per cent of pay-TV market leader BSkyB.

The married father of two, 71, is now said to be the US's largest individual landowner with nearly 2.2 million acres in Maine, Maryland, New Mexico, Colorado and Wyoming.

But while he reportedly prefers life away from the limelight, at home in Elizabeth, Colorado, the man who apparently likened himself to Citizen Kane, is now expected to find himself at the centre of a fierce public battle over pay-TV in Britain.

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