The Recently Announced Merger between Telefonica’s O2 and Liberty Global’s Virgin Mobile Will Put Vodafone and Three UK on the Spot

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By Leo Gergs | 2Q 2020 | IN-5822

 

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While talks around a potential merger have been in the news since the beginning of the month, it only took only until May 7, 2020 for Spanish-based network operator Telefonica and the multinational telecommunications company Liberty Global to announce the merger between their U.K. operations O2 and Virgin Mobile in a 50-50 joint venture. The move will see O2 being transferred into the joint venture on a debt-free basis, while Virgin Mobile will contribute a combined US$13.89 billion (GBP 11.3 billion). Subject to regulatory approval, the transaction will be completed during 2021.

The decision to merge O2 and Virgin Mobile in the United Kingdom must be seen as direct consequence of both strategic and operational concerns from Liberty Group (as the owner of virgin mobile) as well as Telefonica (as the owner of O2). It is furthermore exacerbated by recent developments in response to the outbreak of the coronavirus disease (COVID-19).

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