Liberty gobal to to buy Virgin Media for £15billion

Discussion in 'Current Affairs, News and Analysis' started by brettarider, Feb 6, 2013.

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  1. First heard about it yesterday on the company intranet and confirmed this morning that the deal has gone Not sure what it will mean in the long run either the Vm brand will expand across the other 13 countries were Libery Gobal have a presence I can see the RoI and the UK linking up as VM network goes subsea from Wales and comes out in the RoI. One thing can't see News International being happy.
  2. Bransons'pension fund takes another larger injection of cash. No doubt it'll be "spun" that he's doing the great British taxpayer another favour, just like Northern Rock!
  3. Not sure how it'll work at the moment. Email out this morning saying no change to the branding etc of VM. As it's only a franchise and use of the VM name I'm not sure how much Branson would get out of the deal. However I think VM will be used as a model for the up and comming companies outwith the UK to work to, Statement released to VM staff this morning,

    Today’s announcement lays the foundation for the creation of the world’s largest broadband communications company. Before I go into what that might look like, here are a few details about Liberty Global. As some of you will know, Liberty Global is one of the world’s leading international cable operators. It currently has operations in 13 countries, 11 of which are in Europe, and nearly 20 million customers worldwide. Like Virgin Media, its companies offer TV, broadband and phone services. Its consumer brands include UPC, Unitymedia, Kabel BW, Telenet and VTR. It also has a commercial services division, UPC Business, and a content division called Chellomedia. Virgin Media will be, by some margin, its largest business.​
    Liberty Global is run by a highly experienced management team. Its global headquarters are in Denver, Colorado and its European operations are based in Amsterdam. You can find out more about Liberty Global in a fact sheet that we have posted on the intranet – see the link below.​
    From whatever perspective you look at it, this evening’s announcement is testimony to everything we’ve achieved. On Friday, it will be six years to the day since we launched Virgin Media and it’s a good moment to reflect on how far we’ve come. From a company that some considered little more than an “also-ran” in the market we’ve created a business that, in every area and in the most competitive market in the world, is now decisively setting the pace.​
    • Our broadband is firmly established as the best.
    • With 1.3 million TiVo customers, we’ve launched the UK’s first mass market next generation TV product and stolen a march on not only Sky and BT, but on the likes of Apple, Google and Samsung.
    • We’ve become the first company to integrate mobile into a “quad play” product offering.
    • We’ve transformed our customer service.
    • We’ve re-packaged our products in easy-to-understand bundles that offer unbeatable value.
    • Whether it’s a second set top box, free repairs for life, broadband that delivers what it’s supposed to or unlimited mobile tariffs, we’ve given our customers more for free.
    • We’ve also reinvigorated Virgin Media Business and started the process of doing for businesses and public sector organisations what we’ve done for households up and down the UK.
    In short, we’ve made brilliance standard. And our customers have rewarded us by taking more products, paying us more and staying with us longer. At the same time we’ve maintained a rigorous financial discipline, and together, these have allowed us to generate progressively more and more cash. Some of this we’ve used to invest in the business and some we’ve returned to our investors in the form of an aggressive capital returns programme.
    It is this model that Liberty Global wants to incorporate into its other operations. Many of their companies are at an earlier stage in their evolution than Virgin Media and operate in less mature and competitive markets than the UK. So whilst they are typically growing their customer base more quickly than we are, they have indicated they want to more effectively monetise their base by cross-selling and up-selling more value-added services – much like Virgin Media has done. In addition, few of them are yet to have a mobile offering. So, for example, where well over 65 per cent of our customers are triple or quad play subscribers, some 55 per cent of Liberty Global’s customers take just one product. ​
    But what’s in it for Virgin Media? Well, the Virgin brand will remain a key part of our business, now and in the future. Internally and externally, the restless energy of Richard Branson and the brand he created has been one of the key inspirations for our success and, today, I believe we can justifiably claim that both our company and our people embody all that is great about it. Unsurprisingly, Liberty Global has no intention of changing it. The values it represents will remain at the heart of everything we do.​
    Under the terms of the deal, Liberty Global will acquire all of our shares and a new company will be created. Our investors will receive shares in Liberty as well as some cash. At today’s prices, Virgin Media shareholders will represent around 36 per cent of the enlarged company’s total share capital after the deal is complete. As a result, the transaction provides an opportunity for shareholders to buy into a bigger and more geographically diversified business that combines Virgin Media’s expertise in subscriber management and generating cash with Liberty Global’s scale and growth opportunities in other markets. We believe this will allow us to generate faster, more profitable growth than we could achieve on our own.​
    At an operational level, the deal will enable Virgin Media to accelerate the next, hugely exciting, stage in its development. It is a key part of the rationale for the deal that Virgin Media continues to build on the momentum that it has built over the last year or so. As a result, our focus will continue to be on delivering the key elements of our rocket strategy and our strategic priorities remain the same.​
    • We will continue driving the best digital connectivity – anywhere
    • We will continue delivering irresistible entertainment and services across all devices
    • We will continue our drive to be the first choice for mobile among Virgin Media customers
    • We will continue ensuring Virgin Media Business has the fastest revenue growth in the industry
    • We will continue championing brilliant customer service
    • We will continue to ensure our operations are smart and efficient

    For both our customers and the business, this represents a hugely compelling plan. If we deliver each of its components well, we will transform our consumer and B2B proposition and cement Virgin Media’s fast-growing reputation as the most exciting, innovative and disruptive company in the European entertainment and communications industry. As part of the Liberty Global group, we will be able to set about this task as part of a larger organisation, and with the economies of scale this brings, in terms of innovation, product development and procurement.

    So what does all this mean for you? What is clear from this deal, is that Liberty Global value what Virgin Media has achieved and will continue to develop it. And this goes for our employees too. At the heart of our success has been the engagement of our workforce and, whether you look at it in terms of professional know-how or Heartbeat, you can be proud to be part of a world class organisation with the best people in the industry. This fact is not lost on Liberty Global’s management team. Rather than cover all of the specifics of what the deal will mean here, we have provided a question and answer document on a separate page – see link below – which seeks to address some of the key issues. You will see that there are some areas where, at this point, we simply don’t know what the future holds but have tried to give you as much information as we can at this stage.

    One very important thing to understand is that Liberty Global don’t have a consumer business in the UK so, unlike many mergers, headcount reductions are not a major driver of this deal. While there may, of course, be an element of duplication in some, mostly corporate areas of the business, at an operational level we anticipate that Virgin Media will continue to operate largely in its current form. In fact, for many of you, the deal may offer the increased opportunities as Liberty Global look to harness the skills, discipline and expertise of Virgin Media throughout its European operations.​
    So what happens next? We have about three or four months of intensive activity ahead of us, as both companies seek approval for the deal from various regulatory authorities and their investors. We therefore expect to complete the transaction sometime around early Summer. During this time, Eamonn and I will be focusing on driving this process and I’ve asked Andrew, with the support of the rest of the GEC, to take the lead in managing the day-to-day operations of the business. I know he can count on all your support and undivided commitment.​
    I strongly believe that today’s announcement is a real high point for our business and lays the foundation for a new and exciting chapter in Virgin Media’s development. But all change brings with it some uncertainty. Virgin Media is a close-knit community of highly committed individuals who have worked closely together through some big changes in the market. In navigating these challenges, we’ve forged a unique spirit, resilience and sense of accountability: in short, we’ve become accustomed to being in control of our own destiny and this is something of which the GEC and the Board are very proud. At the same time, however, I’m very conscious that you may not wholeheartedly welcome becoming part of a larger organisation. Some of you may be wondering what the implications are for your roles or for particular projects and may feel unsettled by this development. Whether or not this is true for you personally, we can also undoubtedly expect to see a lot of speculation about the deal in the press, some of which may be ill-informed. As the process unfolds, my commitment – and that of the leadership team – is to communicate with you as regularly and transparently as we usefully can, and to provide you with the answers to as many of your questions as possible. As well as regular updates from the GEC and senior leadership team we’ve set up a place on the intranet where you can access information about the deal and a mailbox where you can send in your questions. This is now live so please use it – the details are below.​
  4. Hastening I hope the death of the TV license. I'm sure their programming will be crap, but crap that I can actually choose to pay for or not.
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  5. Beardies cut of £10billion is 5%.
    500million by my calculation, which will all disappear of shore and little or no tax paid.

  6. No surprise, given my latest VM bill with the 10% price hike dropped through the door yesterday.
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  7. I'm generally happy with VM. I don't see myself getting a better deal elsewhere since we're using the telly, phone and internet package. Telly is basic, of course, but is tivo and good for recording stuff since me and the other half work weird hours.

    But...I have also noticed my bill getting gradually more expensive by two or three quid each month. Keep looking at it to find out if the wife ordered porn or something (I know I didn't order any :/) and there doesn't actually seem to be any change. Even the phone bill isn't up.

    In November it was about 43 quid, then 45 in December then 48 in January. No idea why so I'm assuming it must be the aforementioned price hike.
  8. The trouble with Virgin is they have a limited customer base as they are not digging new ducting.

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  9. Brett, how have the staff reacted to virgin deciding to no longer recognise the CWU?

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  10. I sacked Virgin 4 years ago. I had a package, phone, TV, and broadband. In the eighteen months I put up with them I can`t remember a time when all three were working at the same time. The only part of Virgin that works with anything approaching efficiency is their billing department. So efficient in fact that they continued sending bills months after I`d binned Virgin.
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  11. As a former Vm customer & although I found the network, DL speed much better than BT's, Vm's customer service was equally as awful as BT's.

    However this will be a nice savvy deal for Mr Branson & it makes you think where his primary Business focus will remain on either his Airline, Bank with the train network simmering away until the overhaul of the west coast mainline has been finally resolved..

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  12. Not sure we have a set up were we have reps who sit with the management to discuss issues etc called the voice fourm. Might bother some of the old and bold who miragted from BT etc. I've never been in a union and can't say I will due to them supporting clowns like searchlight and backing the labour party. We get an annual survey where we can say if we are happy or not and what issues we have and on a whole it's a contented work force some not bad benefits etc.

    Certainly something that was an issue before and it's been the top of the agenda for a few years now hopefully it's vastly improved since you last dealt with them. I've had to use them in the past cant say I've had issues. certainly now the platform is more stable and you shouldnt have ab issue with BB/TV although there is the odd issue from time to time. If you fancy switching back PM me your detials and I'll get you on a good package I put a few from here on it I dont get commison for etc so no agenda if your interested?
  13. VM are.... Okay. I'd be off them like a shot if I could find a genuinely unshaped network that had the same uptime/speed potential.
  14. The only main issue I had with Vm was in previous SFA I'd arranged with Vm to have my old equipment collected by an Engineer due to a posting, Mrs B aptly spent the whole day waiting and nobody turned up & she was a tad miffed upon my return from work later that day.

    She was even going to bill Vm an invoice for loss of days salary and the cheeky feckers had the neck to demand the price of the equipment 'they' failed to collect/recover!!
  15. I'm at two minds with the CWU, they don't push nearly as hard as they should but there is the benefit of having a union rep with you if you're ever involved in a hearing. We have care surveys sent out to us where we can raise any points but as with every company they will just be ignored.

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