EU antitrust regulators are expected to give the green light to John Malone’s Liberty Global Inc. (NASDAQ:LBTYA) (NASDAQ:LBTYB) to takeover Virgin Media Inc. (NASDAQ:VMED) for $15.8 billion, according to a report from Reuters.
Liberty Global Inc. (NASDAQ:LBTYA) (NASDAQ:LBTYB)’s bid, if approved, will put Malone on an equal level with rival Rupert Murdoch, owner of British satellite group BSkyB, in the growing European cable market.
“The European Commission does not have any competition concerns about the deal,” one of the sources said in a report.
Malone’s Liberty Global Inc. (NASDAQ:LBTYA) (NASDAQ:LBTYB) announced it was interested in taking over Virgin Media Britain’s second-biggest pay-TV provider in February. Liberty at present is reining over the Europe’s cable operator market. Through this step, the growing competition between cable groups and traditional telecom operators has become more evident.
The rivalry between Malone, the major shareholder of Liberty Global Inc. (NASDAQ:LBTYA) (NASDAQ:LBTYB) and Murdoch, owner of British satellite group BSkyB started almost 10 years ago when both the companies challenged each other over control of U.S. satellite TV broadcaster DirecTV Group.
After the takeover of Virgin Media Inc. (NASDAQ:VMED), Liberty Global will again be in a position to give tough competition to BSkyB Britain’s top pay-TV provider.
Liberty Global Inc. (NASDAQ:LBTYA) (NASDAQ:LBTYB), in a bid to acquire a greater share of the market, has expanded its footprint in its European operations, Ireland to Romania. However, the company could not acquire the Telenet Group of Belgium for $2.7 billion in which it owns a 58 percent stake. In 2010, the company acquired two German rivals to expand itself and its operations in Europe’s largest economy.
News Corporation has not been lagging when it comes to expansion. The company acquired Consolidated Media, which is the Australian pay-television company for $2.1 billion.
Virgin Media Inc. (NASDAQ:VMED) has tried to decrease its cost since the financial crisis by slashing jobs and investing in broadband structure in order to escalate its market share in Britain’s neck to neck cable market.
According to the analysts, the companies are on takeover and expansion spree in order to diversify their source of revenue, which these pay television companies and broadcasters are facing difficulties to earn. This is the reason the broadcasters are gambling on pay television channels; at the same time, cable satellites are seeking new content delivery platforms like Internet.
The announcement from the European Union Competition authority is expected to be released April 15. There was no comment recorded from Antoine Colombani, Commission spokesman for competition policy, and Virgin Media Inc. (NASDAQ:VMED) and no spokesperson was available for comment from Liberty Global Inc. (NASDAQ:LBTYA) (NASDAQ:LBTYB).