O2 and Virgin Media merger closes

1 Jun 2021

Following last month’s confirmation of final approval from the Competition and Markets Authority (CMA) for the merger of O2 UK and Virgin Media, the former’s parent company Telefonica has now announced the closing of the deal. On the back of receiving all relevant regulatory approvals, the Spanish telecoms giant noted that the closing of the transaction had led to the formation of a new joint venture (JV) company, VMED O2 UK Ltd, owned 50% by it and 50% by UK-based Liberty Global.

In a stock exchange filing, Telefonica noted that the constitution of the JV had added ‘significant value’ for it, both from a business and financial perspective, with the Spanish company reporting proceeds of GBP5.5 billion (USD7.8 billion). Of that figure, GBP2.7 billion reportedly corresponded to Liberty Global ‘s cash payment to Telefonica to equalise the pair’s ownership in the JV, while the other GBP2.8 billion corresponded to ‘gross proceeds from recapitalisation’.

United Kingdom, Liberty Global (incl. LGI), O2 UK, Telefonica, Virgin Media