Company Announcements

TEF-Agreement with Liberty Global

Source: RNS
RNS Number : 2543M
Telefonica SA
07 May 2020

TELEFÓNICA, S.A. ("Telefónica") in compliance with the Securities Market legislation, hereby communicates the following:



Telefónica informs that it has reached an agreement with Liberty Global plc to combine into a 50-50 joint venture (JV) their operating businesses in the UK (O2 Holdings Ltd. and Virgin Media UK, respectively) to create an integrated communications provider in the UK with over 46 million video, broadband and mobile subscribers and approximately £11billion of revenue.


The combined entity will be a stronger fixed and mobile player in the UK market and will benefit from the scale and complementary expertise of each partner, who will provide a suite of services to the JV after closing.


The transaction will deliver significant value, with sizeable and highly visible synergies of £6.2bn on a net present value basis after integration costs, capex and revenue benefits of £540 million on an annual basis by the fifth full year post closing, and free cash flow accretive since year one for Telefónica, that expects to receive £5.7bn of proceeds in total after an equalization payment to Telefónica of  £2.5 billion.


The JV will target leverage of between 4x and 5x OIBDA. This move is fully aligned with the New Telefonica strategy to focus and improve market positioning in its core markets.


The parties have agreed to restriction the transfer of interests in the JV to a third party until the fifth anniversary of closing, when it will be subject to a right of first offer in favour of the other shareholder.


The transaction is subject to regulatory approvals, consummation of the recapitalizations and other customary closing conditions.


Please see attached press release.


Madrid, 7 May 2020.



This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact or visit