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Liberty Global, Telefonica in talks over UK merger

Joint venture would look to take on the likes of BT and Sky

The parent companies of Virgin Media and O2 are in said to be in talks about a possible merger, which would enable them to take on the likes of Sky and BT.

According to multiple reports, Liberty Global and Telefonica are discussing bringing together Virgin Media and O2. A deal could be announced as early as next week according to sources.

The reports of the deal has led to speculation about whether Liberty may be open to including ITV in the deal, as the broadcaster has seen ad revenues hit by the coronavirus pandemic. Liberty currently owns 9.9 per cent of the commercial broadcaster.

It’s thought the two companies would create a joint venture, which would be owned 50-50 by each side, with Liberty Global making a payment to Telefónica to ensure they have an equal partnership.

The Financial Times quotes a person “close to Virgin Media” as stating that Liberty Global regards the UK’s exit from the EU as an opportunity to combine with rivals without facing opposition from regulators in Brussels.

May 4th update:

Telefonica has now confirmed it has begun talks with Virgin Media over a deal.

“The process started between both parties is in the negotiation phase, with no guarantee, at this point, precise terms or its probability of success,” Telefonica said.