Telecoms Goliaths Virgin Media and O2 to form major rival to BT with £31bn mega merger
Virgin Media and O2 are merging to create a £31billion telecoms giant, their owners confirmed.
Liberty Global and Telefonica – parent firms of Virgin Media and O2 respectively – said they had agreed a deal after announcing talks were under way on Monday.
The tie-up will create a major rival for former state monopoly BT, which is the biggest provider of broadband and owns the EE mobile network.
Mega merger: Liberty Global and Telefonica – parent firms of Virgin Media and O2 respectively – said they had agreed a deal after announcing talks were under way on Monday.
Combined, the newly-merged company will bring together O2’s 34m mobile customers and Virgin’s 5.3m broadband, pay-TV and mobile users.
The deal is expected to close in the middle of 2021 will need to be approved by regulators. It values Virgin at £18.7billion and O2 at £12.7billion.
The two firms said they will create a ‘full converged platform’ for customers and will invest £10billion in the UK over the next five years.
The 50-50 joint venture will also deliver £6.2billion worth of savings, they added. Mike Fries, boss of Liberty Global, said: ‘We couldn’t be more excited about this combination.’
Jose Maria Alvarez-Pallete, the boss of Telefonica, added: ‘We are creating a strong competitor with significant scale and financial strength to invest in UK digital infrastructure and give millions of consumer, business and public sector customers more choice and value.’
BT boss Philip Jansen said yesterday the deal was ‘not a surprise’ and that his company had no plans to lodge objections with competition authorities.
He added: ‘We welcome good, strong competition.’