NTL:Telewest this morning confirmed an agreement with Virgin Mobile to see the two businesses merge, forming the nation’s first quadruple play broadcaster, offering TV, broadband, fixed line and mobile telephony.
The merger will see NTL:Telewest adopt the Virgin brand in the near future, following a 30 year brand licencing agreement to “harness” the power of Virgin’s well known marque.
The merger sees the cable giant purchase Virgin Mobile for £962 million in cash and shares. The deal will see existing shareholders offered either 3725 pence per share in cash for their stock, shares in NTL:Telewest, or a mixture of the two.
Announcing the deal this morning, James Mooney, executive chairman of the cable firm, said: “It truly is a step-change transaction not only for NTL but for the media sector as an whole in the UK. Central to today’s announcement is our strong belief that offering a quad-play underpins true media convergence, and offering high quality communications services will, we believe, appeal to existing subscribers of the enlarged business as well as new customers.
“There is a natural appeal for mobile, telephony, broadband and television content and ntl is now truly unique in its mass market product offering.”
Charles Gurassa, chairman of Virgin Mobile, added: “This Offer reflects the strong operational and financial performance of Virgin Mobile and represents an excellent opportunity for Virgin Mobile shareholders to realise the significant increase in shareholder value since flotation. We believe this Offer is in the best interests of Virgin Mobile’s shareholders, customers and employees.”
The tie-up between NTL:Telewest and Virgin Mobile has long been mooted, with the company expected to make a second offer after its initial approach was turned down last year (see Virgin Mobile Backs Away From NTL Deal).
The consolidated firm is expected to put pressure on existing media groups, including BSkyB and BT, both of which are preparing triple play products, and have expressed an interest in developing wider mobile services.
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