Virgin Media to be sold to Liberty Global for $23bn

Broadband provider Virgin Media is set to be acquired by US cable company Liberty Global in a deal worth $23.3 billion.

The companies claim the merger will result in the creation of the world's largest broadband company, covering 47 million homes across 14 countries.

Under the terms of the deal, Virgin Media shareholders will receive $17.50 in cash, 0.2582 Liberty Global Series A shares and 0.1928 Liberty Global Series C shares for each Virgin Media share they own.

Mike Fries, president and chief executive of Liberty Global, said the deal would add significant scale to his firm's European operations, and will result in 80 per cent of its revenues coming from five European countries.

"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 Fries.

"Virgin Media will be complementary to our own organic revenue and growth profile, while providing attractive free cash flow enhancement to our shareholders.

"As a result we intend to increase our commitment to share buybacks going forward with an initial target of approximately $3.5 billion over a two-year period upon closing," Fries concluded.

Neil Berkett, chief executive of Virgin Media, added: "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."

Virgin Media also announced its full-year results for 2012, which showed that revenue was up 2.7 per cent on last year and topped 1.654m. Operating profit grew by 30 per cent to 699.1 million over the same time period.