Virgin Media CEO Stepping Down After Liberty Global Purchase

ENGLEWOOD: Neil Berkett, the CEO of Virgin Media, is planning to exit the company, in the wake of Liberty Global’s $23.3 billion takeover.

The combination of Liberty Global and Virgin Media will create the world’s leading broadband communications company, covering 47 million homes and serving 25 million customers with a footprint across 14 countries. The purchase price represents an equity value of around $16 billion and an enterprise value of $23.3 billion. The transaction is subject to shareholder approvals.

In a conference call this morning, Berkett announced that he will be stepping down once the takeover is complete.

Mike Fries, the president and CEO of Liberty Global, said: “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. Virgin Media will add significant scale and a first-class management team in Europe’s largest and most dynamic media and communications market. After the deal, roughly 80 percent of Liberty Global’s revenue will come from just five attractive and strong countries—the U.K., Germany, Belgium, Switzerland and the Netherlands.

"Like all of our strategic acquisitions we expect this combination to yield meaningful operating and capex synergies of approximately $180 million per year upon full integration. But just as importantly, Virgin Media’s market leading innovation and product expertise, particularly in mobile and B2B, will accelerate our own development of these business segments.

"For these and other reasons, Virgin Media will be complementary to our own organic revenue and OCF 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."

Berkett commented: “Over the past six years, Virgin Media has transformed the digital experience of millions of customers, catalyzed a deep-rooted change in the U.K.’s digital landscape and delivered impressive growth and returns for our shareholders. I’m confident that this deal will help us to build on this legacy. 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 capitalizing on the exciting opportunities that the digital revolution presents, both in the U.K. and across Europe.”