UPC Ireland to ‘join forces’ with Virgin Media

The Cush · 18-11-2014 7:54pm #1

According to reports regarding an internal Liberty Global email it looks like UPC may eventually merge operations with Virgin Media.

An internal email sent to all staff this morning says Magnus Ternsjö, the managing director UPC Ireland, is to join the executive committee of Virgin and will now report directly to Tom Mockridge, the former News International executive who runs Virgin Media.

The email states that both companies will seek “economies of scale” and are exploring “further regional co-operation”, raising the possibility that UPC may eventually be folded into the operation of Virgin, which was bought in February by Liberty for £15 billion (€18.8 bn).

...

Dana Strong, the former chief executive of UPC Ireland who still chairs the company, is the chief operating officer of Virgin Media. Robert Dunn, another former boss of UPC Ireland, is its chief financial officer.

https://www.irishtimes.com/business/sectors/media-and-marketing/upc-ireland-to-join-forces-with-british-company-virgin-media-1.2005446

Copy of the email from http://www.siliconrepublic.com/comms/item/39376-upc-ireland-to-become-more/

icdg · 18-11-2014 9:46pm

Yeah obvious this was going to happen - they are facing a common competitor which operates across both jurisdictions (indeed the idea of "Sky Ireland", rather than "BSkyB in Ireland", is only something which has come to fruition very relatively recently and Sky Ireland is very much only a marketing and sales operation).

In addition they were once the same company and doubtless contacts have been maintained (though it is eight years they have been separated, longer than the seven years they were both NTL) and renewed since the takeover.

From a branding point of view I wouldn't see any changes occurring and when changes do occur on that front I'd expect it to be in the UK operation - Liberty owns 100% of the UPC brand whereas the Virgin brand is licenced from Richard Branson for not insubstantial fees.

The Cush · 30-11-2014 10:09pm

Speculation in today's newspapers that Vodafone may be back in the picture to buy Virgin Media with a price of €32bn or more being mentioned. Liberty Global acquired the cable company for £16bn two years ago. Vodafone looked at buying it at some years ago but considered the then price of £8bn price tag too high at the time.

The reason for the speculation is BT's plan to move back into the mobile market and is in early talks to buy EE or O2 followed by a move to quad play of landline, mobile, broadband and pay-tv. According to the ST article Vodafone buying Virgin Media "would create a strong bulwark against a resurgent BT".

The SBP states that Vodafone and Liberty Global are in discussions about a potential $130bn merger.

Interesting times ahead for UPC.

icdg · 01-12-2014 10:33am

This is all in the context where BT is sniffing about buying its own former mobile operation O2, which Telefonica never properly integrated. I don't think Vodafone can afford Liberty who have made it clear that they'd have to buy the company lock stock and barrel not just Virgin.

[Deleted User] · 01-12-2014 10:52am

With all of these big companies potentially buying each other will competition in the industry not begin to suffer as a result due to less competitors in the market and cause customers to pay higher prices into the future.

former legend · 01-12-2014 12:09pm

Deleted User wrote: »

With all of these big companies potentially buying each other will competition in the industry not begin to suffer as a result due to less competitors in the market and cause customers to pay higher prices into the future.

Not really; if UPC merges fully with Virgin and then is bought by Vodafone, you still end up with the same number of TV providers and the same number of mobile phone operators as you have now.

The only overlap would be in fixed line phones (who cares?) and broadband provision, so it probably depends on what sort of broadband market share Vodafone have.

watty · 01-12-2014 5:25pm

Virgin and UPC are both owned by Liberty who also has Cable in other countries and satellite somewhere too.

Liberty will sell all or nothing. Vodafone has bought some cable elsewhere. I suppose they could borrow the money to buy Liberty, that usually ends badly, c.f. Telecom Eirean and TV3 and Sean Quinn.

dublinbusdude · 01-12-2014 6:05pm

By the sounds of it; UPC will be Virgin soon as UPC wanted to join the mobile phone network so it would make sense if UPC Ireland was rebanded as Virgin Media Ireland

icdg · 01-12-2014 9:10pm

Except for the fact that they don't own the Virgin name and they do own the UPC name. The Virgin name will almost certainly go in the UK once they can activate a break clause in the agreement with Richard Branson.

The Cush · 01-12-2014 11:39pm

watty wrote: »

I suppose they could borrow the money to buy Liberty, that usually ends badly, c.f. Telecom Eirean and TV3 and Sean Quinn.

I think Vodafone and Liberty Global are in a different league.

Vodafone has a lot of spare cash, they sold their stake in Verizon Wireless for $130bn last year, of which they paid $54bn to shareholders. They paid about €15bn for 2 cable companies within the last 18 months Kabel Deutschland (Germany)/ONO (Spain).

The latest speculation is the takeover deal would cost £80bn+ which would include Liberty's $41bn debt. Liberty Global has a market value of around $35 billion compared with $95 billion for Vodafone.

In Germany Liberty Global is in the process of unifying cable brands Unitymedia and Kabel BW by Spring next year to Unitymedia with a hormonised channel lineup and Horizion STB. Regulatory hurdles will be the main obstacle to a deal. Kabel Deutschland (Vodafone) is the largest cable operator with 8.3 million households in 13 federal states. Unitymedia Kabel BW (Liberty Global), the second-largest market player with 7.1 million households across three federal states.

watty · 02-12-2014 1:29pm

It's feasible and does fit with Vodafone's recent activity. But they would be increasing debt, esp. as they would need money to invest in the Networks hardware and rollouts.

icdg · 02-12-2014 1:58pm

As I say I think a large aspect of this is the UK business press hunting for a story in terms of "what will be Vodafone's response" if BT reacquires O2. I'm not saying there's smoke without fire but I think it's being talked up more than it should be.

What's happening at BT is interesting as it signifies a quite big shift in group priorities after the recent focus on bundling sport and broadband and could potentially impact on how much BT is willing to spend on Premier League rights in an auction which will be happening in the next 6-9 months.

ebsa · 15-01-2015 3:08am

Liberty Global is embarking on a major restructuring of its European subsidiaries. As part of the reorganisation process, Virgin Media will raise GBP300 million of secured bonds and GBP625 million-equivalent of unsecured bonds for its acquisition of UPC Ireland.

The Cush · 15-01-2015 9:26am

ebsa wrote: »

Liberty Global is embarking on a major restructuring of its European subsidiaries. As part of the reorganisation process, Virgin Media will raise GBP300 million of secured bonds and GBP625 million-equivalent of unsecured bonds for its acquisition of UPC Ireland.

News reports

Liberty Global is reorganising its European businesses, merging UPC Netherlands with Ziggo, and UPC Ireland with Virgin Media, according to sources close to the matter.

Netherlands-based Ziggo is raising 730m-equivalent of new senior bonds to finance the merger of UPC Netherlands into a new Dutch credit pool. Virgin Media meanwhile is raising £300m of secured bonds and £625m-equivalent of unsecured bonds to back its acquisition of UPC Ireland.

http://in.reuters.com/article/2015/01/12/idINL6N0UR2B920150112

Liberty Global is reorganising its European businesses, merging UPC Ireland with Virgin Media and UPC Netherlands with Ziggo to create a simpler debt structure.

...

Dutch cable operator Ziggo, which Liberty Global acquired late last year, is to raise new debt amounting to €730 million (US$862.1 million) to finance the merger of UPC Netherlands, while Virgin Media is to raise approximately £925 million to finance the acquisition of the Irish operation.

http://tbivision.com/news/2015/01/liberty-global-reorganises-european-businesses/376872/

bk · 15-01-2015 5:01pm

This seems to be more of an accounting "trick" then a real change:

The overall effect of the changes will be to remove the relevant businesses from the UPC credit pool, enabling high-yield debt purchasers to avoid concentration limits, according to Reuters.

UPC Ireland actually already became a sort of subdivision of Virgin Media a few months ago, with the head of UPC Ireland reporting to the head of Virgin Media. Also I here engineering staff etc. are now working very closely with Virgin Media staff.

I wonder if this might have something to do with previous rumours of Vodafone looking to buy UPC. Perhaps Vodafone would be more interested in buying just Virgin Media UK + Ireland, then the whole of Liberty Global.

icdg · 15-01-2015 6:03pm

Yeah the organisational changes for UPC Ireland happened on 1st December. The Dutch situation is a bigger change as the two operations there will be completely integrated and it will be the first time the UPC name will be dropped - in its home market, no less.

bk · 15-01-2015 8:06pm

icdg wrote: »

Yeah the organisational changes for UPC Ireland happened on 1st December. The Dutch situation is a bigger change as the two operations there will be completely integrated and it will be the first time the UPC name will be dropped - in its home market, no less.

In that case I wonder will we see the Virgin Media brand here, or perhaps the opposite, the UPC brand in the UK. I suppose it depends on the licensing of the Virgin name.

Also I wonder if we will see the superb Virgin Media TiVo box here? Now that would give Sky+ a run for it's money.

icdg · 15-01-2015 9:10pm

bk wrote: »

In that case I wonder will we see the Virgin Media brand here, or perhaps the opposite, the UPC brand in the UK. I suppose it depends on the licensing of the Virgin name.

Indeed. Personally I think it more likely the UK operation would become UPC than the Irish operation become Virgin Media. After, better to operate under your own brand than one licenced from a third party? That is unless this is some sort of prelude to a demerger and sale of the UK/Irish assets, but I don't think it is. Otherwise the acquisition made no sense in the first place.

Also I wonder if we will see the superb Virgin Media TiVo box here? Now that would give Sky+ a run for it's money.

That would be a good idea. They've hung a lot on the Horizon umbrella though, despite all the teething problems they've had with it.

The Cush · 13-02-2015 2:15am

This from Liberty Global's Q4 and 2014 results, published earlier today

Subsequent to year end, we initiated a series of transactions to restructure our credit pools. As part of
this reorganization, we extracted UPC Broadband Ireland Ltd. in February 2015 and plan to extract our
Dutch operating entity, UPC Nederland B.V., in March 2015 from the UPC credit pool and combine
them with our Virgin Media and Ziggo credit pools, respectively, in order to create strong and well positioned
regional assets and to further strive for operating efficiencies.

http://www.libertyglobal.com/pdf/press-release/Liberty-Global-Earnings-Q4-14-FINAL.pdf

7upfree · 14-02-2015 8:39pm

icdg wrote: »

They've hung a lot on the Horizon umbrella though, despite all the teething problems they've had with it.

TiVo can't do what Horizon does? What makes it better?

http://store.virginmedia.com/discover/tv/tivo/explore/welcome.html

icdg · 19-02-2015 1:52pm

It appears there is big news due out shortly from UPC about job losses as a result of the merger:

http://www.irishtimes.com/business/technology/fears-for-170-jobs-as-upc-to-implement-restructuring-plan-1.2109578

Exiledrover · 19-02-2015 1:54pm

Up to 170 job losses

The Cush · 02-04-2015 10:51pm

http://www.broadbandtvnews.com/2015/04/02/virgin-confirms-tivo-extension/

Virgin Media has signed a three-year extension to its agreement with TiVo, keeping the advanced set-top box in UK homes until at least 2018.

When Virgin’s cable operation was acquired by Liberty Global in 2013 there had initially been speculation that the operator might initially move to a version of its Horizon software. However, with an installed base of 2.5 million homes, such a suggestion appeared far fetched.

Under the new agreement Virgin has committed to the development of next-generation solutions from TiVo.

Virgin Media began to offer a TiVo-powered offering in 2010, said it ended 2014 with 2.5 million TiVo subs, equal to about 68% of its video subscriber base. TiVo ended its fiscal year (ended Jan. 21, 2015) with almost 5.47 million subs (944,000 TiVo-owned subs, and 4.52 million via MVPD partners).

http://www.multichannel.com/news/technology/virgin-media-extends-tivo-agreement/389388

watty · 03-04-2015 7:45am

icdg wrote: »

It appears there is big news due out shortly from UPC about job losses as a result of the merger:

http://www.irishtimes.com/business/technology/fears-for-170-jobs-as-upc-to-implement-restructuring-plan-1.2109578

UPC has been moving Irish jobs to Asia anyway.

The Cush · 21-06-2015 10:37am

Sunday Times reporting that UPC are drawing up plans for a €2m rebranding to Virgin Media at some point in the future.

Elmo · 22-06-2015 2:13am

The Cush wrote: »

Sunday Times reporting that UPC are drawing up plans for a €2m rebranding to Virgin Media at some point in the future.

Imagine they'll launch Virgin mobile

UPC never could get away from NTLs bad rep

Joo0 · 22-06-2015 2:55am

Another rebrand? I think UPC have more pressing issues to sort out first.
Virginmedia.ie was registered earlier this year

dam099 · 22-06-2015 3:06pm

The Cush wrote: »

Sunday Times reporting that UPC are drawing up plans for a €2m rebranding to Virgin Media at some point in the future.

I would think they will wait and see how the Liberty Global/Vodafone discussions go first but would make sense if they are still part of the same organisation after that all shakes out.

Niemoj · 23-06-2015 4:58am

Very interesting stuff.

7upfree · 23-06-2015 10:44am

http://www.bloomberg.com/news/articles/2015-05-20/liberty-s-malone-starts-pursuit-of-vodafone-big-banana-prize

John Malone’s comparison of potential merger partner Vodafone Group Plc to “a big banana in the jar” is one of the more arresting images used in the world of high-stakes deal-making.

The question posed by the billionaire chairman of Liberty Global Plc during an interview on Tuesday is: “How do you get your hand out of the jar with the banana?”

Much of the speculation about a tie-up between Malone’s European cable empire and the world’s second-biggest mobile-phone operator has assumed that Vodafone would be the suitor. Its 62.7 billion pound ($97.5 billion) market value is more than double that of Liberty.

Yet Malone’s comments suggest that, while the 74-year-old sees “enormous potential synergies” in a deal with the U.K.- based carrier, he’s far from ready to cede control of his fast-growing company. Some analysts said he may be trying to put pressure on Vodafone to split its emerging markets business in Africa and India from its European operations -- the assets most prized by Liberty.

Neil Campling at Aviate Global in London said Liberty could even emerge as the aggressor in any tie-up. “For Liberty it’s not a matter of if but when they get Vodafone to the table,” he said.

Malone pointed to the “philosophical differences” between the two companies’ business models on Tuesday, with his high-leverage, rapid-growth strategy compared with Vodafone’s more sedate commitment to dividends and an investment grade credit rating.

That could make a debt-funded deal easier for Malone to pull together despite its smaller size, UBS brokers wrote in a note on Wednesday.

Mr Anderson · 06-07-2015 10:40am

Exiledrover wrote: »

Up to 170 job losses

I was one of those 170.

UPC Ireland to ‘join forces’ with Virgin Media

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