As part of the acquisition, Liberty Global will relocate from Delaware to the United Kingdom by becoming a subsidiary of a new, U.K.-based holding company. Liberty Global’s current headquarters and other principal offices will remain in place and the company will be listed on NASDAQ exchange, continuing to report earnings and other financial statements in accordance with Securities and Exchange Commission regulations, including dollar denominated financial statements. After closing of the transaction, Liberty Global may look to implement a European listing. Virgin Media will continue to operate under the Virgin Media brand in the United Kingdom. Liberty Global’s Board of Directors will continue to form the board of the company, with the addition of one Virgin Media director to be named prior to the closing.

   “Over the past six years, Virgin Media has transformed the digital experience of millions of customers, catalyzed a deep-rooted change in the United Kingdom’s digital landscape and delivered impressive growth and returns for our shareholders,” said Virgin Media CEO Neil Berkett. “I’m confident that this deal will help us to build on this legacy. Virgin Media and Liberty Global have a shared ambition, focus on operational excellence and commitment to driving shareholder value. The combined company will be able to grow faster and deliver enhanced returns by capitalizing on the exciting opportunities that the digital revolution presents, both in the United Kingdom and across Europe.”

   The implied purchase price represents an equity value of approximately $16 billion and an enterprise value of approximately $23.3 billion before taking into account transaction costs and other expenses. The cash component of the equity purchase price totals approximately $5.9 billion, which will be funded largely through a combination of debt financing and available liquidity of both Liberty Global and Virgin Media.

   “We intend to increase Virgin Media’s debt by more than $3.0 billion, such that on a pro forma basis, Virgin Media’s debt will fall well within our normal leverage target of four to five times annualized OCF,” Liberty Media said in a company statement. “Together with the net proceeds of Virgin Media’s debt financing, the transaction will be funded with cash and other sources of liquidity of Virgin Media and cash and borrowing availability under Liberty Global’s existing credit facilities. Adjusting for the transaction and completion of the intended financings, we estimate the leverage on the combined company would have been approximately five times at December 31, 2012, which would serve as a modest deleveraging event for current Liberty Global shareholders.”

   Based on issued and outstanding shares of Liberty Global as of Feb. 1 and adjusting for the transaction, it is expected that Virgin Media shareholders will own approximately 36 percent of outstanding Liberty Global shares and have approximately 26 percent of the new company’s voting rights.

   Following completion and authorization of the merge, Liberty Media said the combined company would be focused on its most strategic markets in Europe, with an emphasis on technological change for customers. These changes include: complementary strengths across product suites with aligned triple-play products; roadmap and expertise across digital TV, broadband and telephony services; mobility and B2B expertise offer significant additional growth potential in key markets.

   Liberty Global President and CEO Mike Fries said the merge provides significant potential to monetize a large-scale customer base, with an opportunity to deliver current customers enhanced bundled and premium services.

   “Adding Virgin Media to our large and growing European operations is a natural extension of the value creation strategy we’ve been successfully using for over seven years,” Fries said in a statement. “Virgin Media will add significant scale and a first-class management team in Europe’s largest and most dynamic media and communications market. After the deal, roughly 80 percent of Liberty Global’s revenue will come from just five attractive and strong countries – the United Kingdom, Germany, Belgium, Switzerland and the Netherlands.”

   Fries added that he believes that the creation of a U.K. PLC as a new holding company will have several business and financial benefits, including increased strategic and financial flexibility, as it pertains to value creation for its shareholders.

   “Like all of our strategic acquisitions we expect this combination to yield meaningful operating and capex synergies of approximately $180 million per year upon full integration. But just as importantly, Virgin Media’s market leading innovation and product expertise, particularly in mobile and B2B, will accelerate our own development of these business segments,” said Fries. “For these and other reasons, Virgin Media will be complementary to our own organic revenue and OCF growth profile, while providing attractive free cash flow enhancement to our shareholders. As a result, we intend to increase our commitment to share buybacks going forward with an initial target of approximately $3.5 billion over a two-year period upon closing.”