Liberty Global, Telefonica agree $38 billion merger of UK businesses

) will merge to create a major new player in UK mobile and broadband communications in a deal valued at around 31 billion pounds including debt.

The parent companies, which expect to achieve 6.2 billion pounds of synergies on an annual basis by the fifth full year after closing, will have equal ownership of the combined entity, they said on Thursday.The companies said the deal would value Telefonica’s O2 at 12.7 billion pounds and Liberty’s Virgin Media at 18.7 billion pounds, both on a total enterprise value basis, including debt.

Both parties expect to receive net cash proceeds at closing following a series of recapitalisations that will generate 5.7 billion pounds in proceeds for Telefonica and 1.4 billion pounds for Liberty, they said. The deal will allow Telefonica to squeeze cash from O2 and keep a presence in Britain, while Virgin will gain access to its own wireless network, saving the money it has spent until now on leasing capacity for its mobile operations.

Reporting by Juby Babu in Bengaluru and Isla Binnie in Madrid; Editing by Subhranshu Sahu and Mark Potter

Thanks God. Tired of getting it from two sides.

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