Telefónica and Liberty Global announced this Thursday the merger of Virgin Media and O2 in the UK. The joint company will lead the telecommunications market in the country.

Spanish company Telefónica and John Malone’s international operator Liberty Global announced on Thursday an agreement to merge its subsidiaries Virgin Media and O2 in the United Kingdom.

The news thus confirms the rumors that were circulating and gives birth to the largest telecommunications operator in the country, surpassing the historic BT.

Both companies will now occupy 34% of the market in the United Kingdom, surpassing BT’s 32% share with a total of 46.5 million video, broadband and mobile subscribers, (of which 32.6 million correspond to mobile, 5.3 million to fixed broadband, 4.9 million to fixed voice and 3.7 million to pay TV).

The newly merged company, they said, will be a 50-50 joint venture.

Prior to the merger, O2 had a market value of £12.7 billion and Virgin Media of US$18.7 billion. With the merger, they announced, they will invest £10 billion in infrastructure over the next five years.

“This is the largest corporate operation that Telefónica has carried out in its history, and it was in the midst of the pandemic. Hundreds of people had to work remotely. It was a major challenge, not only for the transaction itself, but for the way and the moment in which it was done. This shows that despite the situation, progress can be made and very attractive projects can be created,” José María Alvarez-Pallete, CEO of Telefónica, to Onda Cero.

As part of the operation, he added, Liberty Global had to pay Telefónica £ 2.5 billion to “equalize the values of both companies and be able to start from the same base.”

“We are a leading mobile operator in the UK and Liberty Media is a leading operator in the world of broadband and television,” he said.

The operation will now have to be approved by the British competition authorities.