EU signs off on Liberty Global’s deal to buy Virgin Media
The European Commission announced this morning that it had put its stamp of approval on Liberty Global’s $23 billion purchase of Virgin Media.
The European Commission found that the deal didn’t raise any competitive concerns. John Malone’s Liberty Global does business out of the Denver suburb of Englewood, but abroad it’s the largest cable operator in Europe. Virgin Media is the United Kingdom’s second-largest pay-TV provider behind Rupert Murdoch’s BSkyB.
“The Commission's investigation confirmed that the transaction would not raise competition concerns, in particular because the parties operate cable networks in different member Ssates and because of the merged entity's limited market position in the wholesale of TV channels in the UK and Ireland,” according to the European Commission.
The cash and stock deal was first announced in early February and is slated to close in the second quarter. Once the deal closes, Liberty Global will have 25 million customers and pass 47 million homes in 14 countries, which would surpass Comcast as the world’s largest cable operator. Currently, Comcast is king of the cable operators worldwide with 22 million subscribers.
Liberty Global provides TV, provides triple play services 10 EU countries under the brands of Telenet Group Holding NV, Unitymedia and UPC, among others. In addition, through its content division Chellomedia, Liberty Global produces and supplies a number of TV channels to TV operators, including in the United Kingdom.
The European Commission also looked at the vertical link between Liberty Global's activities in the wholesale supply of pay-TV channels. On that front, the commission concluded that the merged entity was unlikely to shut out competing pay TV retailers by withholding its TV channels from them, given its very limited presence in the wholesale supply of TV channels and the incentive to license its TV channels as broadly as possible.
“Similarly, it is unlikely that the merged entity would shut out competing TV channel broadcasters from access to the retail Pay TV market, given the number of alternative distribution platforms to Virgin Media’s cable network (e.g. BSkyB's satellite platform) and the importance of offering a large variety of TV channels in order to attract Pay TV subscribers,” the commission wrote.