US-based cable operator Liberty Global said late Tuesday that it will acquire Virgin Media in a stock and cash merger valued at USD 23.3 billion, eyeing key strategic markets in Europe.
The deal hopes to create "the world's leading broadband communications company", which would cover 47 million homes and serve 25 million customers in 14 countries, the two groups said in a joint statement.
It said the new company will focus on "the strongest and most strategic markets in Europe, with the scale to be at the forefront of technological change for customers."
The companies hailed what they called "complementary strengths across product suite, with aligned triple-play products, roadmap and expertise across digital TV, broadband and telephony services.
Meanwhile "Mobility and B2B expertise offer significant additional growth potential in key markets", they added in a statement.
According to the terms of the agreement, Virgin Media shareholders will receive for each share of the Britain-based firm USD 17.50 in cash, 0.2582 Liberty Global Series A shares and 0.1928 Liberty Global Series C shares.
The transaction implies a price of USD 47.87 for each Virgin Media share, a 24 per cent premium over Virgin Media's closing price on Monday.
Liberty Global shares lost 2.27 per cent to end at USD 67.88 Tuesday and dropped 0.75 per cent to USD 67.37 in after-hours trading.
Virgin Media has approximately seven million customers in Britain, where it provides broadband Internet, telephone, television and mobile phone services. Its main competitor is pay-TV satellite broadcaster BSkyB.
"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," said Mike Fries, President and CEO of Liberty Global.
Virgin Media CEO Neil Berkett added: "Virgin Media and Liberty Global have a shared ambition, focus on operational excellence and commitment to driving shareholder value. 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."