Virgin Media and O2 to join forces in £31bn deal

The merger between Telefonica and Liberty Global will create the UK’s largest phone and internet operator

A person walks past a Virgin Media mobile phone store, closed-down due to the Covid-19 pandemic, in London on May 4, 2020. Spanish group Telefonica on Monday said it was in talks with US cable giant Liberty Global to merge their telecoms operations in the UK. Picture: AFP/TOLGA AKMEN

The joint venture, first reported by Bloomberg, is a chance for both parent companies to rework two middling-assets into a fully fledged competitor to BT Group in so-called converged services, which combine fixed and wireless phone, broadband and television. For Telefonica chair Jose Maria Alvarez-Pallete, it’s also an opportunity to signal to investors he’s committed to restructuring the debt-laden company.

Both sides will have the right to kick off an initial public offering three years after the deal closes.

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