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Recently, Liberty Global Inc. (LBTYA - Analyst Report) received a shot on its arm as the European Union Regulatory Authority cleared its proposed acquisition of Virgin Media Inc. . On Feb 2013, Liberty Global came out with a joint press statement with Virgin Media that the two companies have entered into an agreement par which, Liberty Global will acquire a 100% stake in Virgin Media, in a cash and equity deal. The deal is worth around $15.8 billion or an enterprise value of nearly $23.3 billion.

After the acquisition, Liberty Global will become the largest cable TV MSO (multi service operator) of the world, surpassing  Comcast Corp. (CMCSA - Analyst Report), the largest cable MSO of the U.S. Together, Liberty Global and Virgin Media will have approximately 25 million subscribers compared with nearly 22 million subscribers of Comcast. In U.K., the merged entity will become a formidable challenger to BSkyB, the largest pay-TV operator of the U.K. BSkyB is partially controlled by News Corp. (NWSA - Analyst Report).

Liberty Global is gradually establishing a strong foothold in the European cable TV market. We believe that the long-term business fundamental of the company is very intriguing, primarily due to a strong demand for its digital cable-TV services, faster broadband and triple-play bundled offerings. Acquisition of Virgin Media will enable Liberty Global to explore U.K., which is one of the most lucrative markets in Europe.   

In the coming years, we believe Liberty Global’s revenue will continue to benefit from a ‘triple play’ of video, broadband, and telephone, as it signs up more “bundled” customers in Europe. The triple-play customer base spurted 15.8% year over year in 2012. The company is also concentrating on its double play product, Internet and telephony, which has the potential to expand.  Double play customer base penetration nudged by 5.6% year over year in 2012.

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