More cable consolidation expected
Liberty Global’s US$23.3 billion (€17.9 billion) buyout of Virgin Media could lead to more consolidation in the European cable space, predicts Virgin chief operating officer Andrew Barron.
Speaking to DTVE at Cable Congress last week, Barron said that consolidation was a “fundamental truth of our industry,” citing recent activity in the German and Polish markets.
Last year European powerhouse Liberty Global completed the merger of its two German subsidiaries Unitymedia and KabelBW into a single organisation, while Polish pay TV operators Cyfra Plus and ‘n’ merged to create nc+.
“Consolidation is a truth of our industry – the reason for that is we benefit from scale, and scale allows us to bring more innovation and more investment to serve customers better. So I think you’re going to see more consolidation in our industry – we think it’s a good thing,” said Barron.
Also speaking to DTVE at Cable Congress last week, Marissa Drew, co-head of global market solutions at Credit Suisse, described the Liberty Global-Virgin deal as an “absolutely seminal moment” for the industry and also tipped more M&A activity.
“I think the advent of being able to do a large deal like this makes people dust off the shelf of the art of the possible, so things that might not have been able to be done six or nine months ago, maybe people are taking another look at those files,” she said,
Drew claimed that the amount of debt Liberty was able to raise to agree the Virgin deal was a “watershed moment” post-financial crash, and added that “the regulatory environment is also, I believe, receptive to the concept of cable consolidation.”