Mergers and acquisitions

: a case study on Liberty Global Inc. and Virgin Media Inc.

Abstract

M&A deals have increased with time as a result of ease of access to information, market liberalization and globalization as a whole. On a broader note, Cross-border M&A may also be seen as a current trend, one which is still to expand in the next few years. The benefits of Cross-border M&A extend to the economy in which the acquiring firm expands to and this can therefore be seen as a form of Foreign Direct Investment. The liberalization of markets overall makes them integrated to some extent therefore imposing more pressure on the competitiveness of each firm. The Technology, Media & Telecommunications industry is one of the most competitive industries with rapid changes in technology which if not quickly adopted may cost firms in the industry their value and existence on the market. This work studies a real-life deal that occurred this year, 2013 between Liberty Global Inc. and Virgin Media Inc. The acquirer Liberty Global Inc. like many firms, had the motive of expansion to its existing empire which is mainly across Europe. This work assesses the worthiness of implementing the deal and prospects after the deal is made. After thorough assessment, it is then discovered that the deal and 24% premium paid are worthy as the target firm proves to be currently undervalued with great potential in the next five years. Cost synergies given the efficiency of operations mainly by the target firm are also a possibility. However, it is worth noting that all the discovered benefits are only to be realized provided that the merged firm is managed efficiently with great caution of the risks at hand.

Date of Award	2013
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Peter Iordanov Tsvetkov (Supervisor)