Liberty Global to buy Virgin Media for $16B

NEW YORK — Liberty Global Inc., the cable TV operator controlled by media mogul John Malone, is buying UK-based Virgin Media Inc. in a $16 billion deal that steps up the rivalry between Malone­ and fellow billionaire Rupert Murdoch.

Liberty Global is paying $5.9 billion in cash and the rest in stock for Virgin Media. The combination, announced late Tuesday, will provide stiffer competition in Britain to satellite TV provider BSkyB, in which Murdoch’s News Corp. owns a 40 percent stake. The combined company will become one of the world’s largest providers of cable TV, Internet, and phone services.

‘‘Liberty Global together with Virgin Media is a powerful combination,’’ Liberty chief executive Michael Fries said Wednesday. ‘‘In fact, it hits the mark on just about every strategic and operating criteria we have established for our company and provides significant benefits to Virgin Media subscribers and investors.’’


Liberty Global is the largest cable operator in most of its 11 European markets. Virgin Media is the second-biggest pay TV company in Britain, after BSkyB, or British Sky Broadcasting Group.

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Fries said that after the deal, about 80 percent of the company’s revenue will come from Britain, Germany, Belgium, Switzerland, and the Netherlands. The companies said they had combined revenue of $16.8 billion last year.

Besides the cable TV, Internet, and landline phone operations, Virgin Media runs a mobile phone business. That’s a business Liberty Global doesn’t currently have. Virgin Group’s boss, Richard Branson — a multibillionaire, like Malone and Murdoch — has a minority stake in Virgin ­Media.

The deal remains subject to approval by shareholders and regulators.

Associated Press