Virgin Media O2 and Daisy Unite to Form £3bn Business Telecoms Group
In a significant development in the UK telecoms industry, Virgin Media O2 and Daisy Group are set to merge their business communications and IT operations to create a £3bn telecoms powerhouse. According to sources, the two companies will announce the deal later today, combining their operations to form a company with annual revenues of approximately £1.4bn.
The merger, which was reported by Sky News, will see Virgin Media O2 own 70% of the new business, while Daisy Group will own 30%. The tie-up is expected to create a stronger challenger to BT Group, Britain’s biggest provider of IT and telecoms services to small and medium-sized businesses (SMEs).
The new VMO2-Daisy business will have roughly 700,000 customers and be valued at between £2.5bn and £3bn, including debt. Industry insiders suggest that combining the two operations is expected to produce substantial cost savings. Sky News understands that Matthew Riley, the Daisy Group founder, will chair the company, while Jo Bertram, the managing director of Virgin Media O2 Business, will be its chief executive.
This deal marks the latest in a string of transactions engineered by Mr Riley since he founded Daisy in 2001. According to Sky News, one source close to the deal believes that it is likely to be subjected to rigorous scrutiny by the Competition and Markets Authority, but is not expected to encounter any major obstacles.
The merger is seen as a significant move in the UK telecoms market, which has been dominated by BT Group for many years. The creation of a new, larger player in the market could potentially disrupt BT’s market share and provide SMEs with more choice and competition. As Sky News reports, both Virgin Media O2 and Daisy Group have been contacted for comment on the deal.
The deal is also a significant development for Matthew Riley, who has been instrumental in building Daisy Group into a successful business. As Sky News notes, Mr Riley will chair the new company, which will have a significant presence in the UK telecoms market. With annual revenues of £1.4bn and a customer base of 700,000, the new VMO2-Daisy business is set to be a major player in the industry.
In a statement, Sky News said that the merger is expected to be a "game-changer" in the UK telecoms market, providing a stronger challenger to BT Group and increasing competition in the industry. The deal is set to be announced later today, and is expected to have significant implications for the UK telecoms market.
