Virgin Media O2 and Daisy Group to Merge in Landmark Deal
In a significant development in the UK business communications and IT sector, Virgin Media O2 and Daisy Group have announced plans to merge their complementary direct B2B operations to create a major new force in the industry. The deal, which is expected to close in early H2 2025 subject to customary regulatory approvals, will see the creation of a new B2B company, combining Virgin Media O2 Business and Daisy Group, with an ownership split of 70% Virgin Media O2 and 30% Daisy Group.
The new entity, which will have annual pro forma revenues of around £1.4 billion, will offer a comprehensive range of best-in-class digital-first connectivity solutions and managed services all under one roof. This will include cloud-based communications tools, 5G Private Networks, IoT connectivity, security solutions, and AI-powered products, such as O2 Motion. According to Virgin Media O2, the company will be supported by fixed and mobile connectivity wholesale agreements with Virgin Media O2, and supplier arrangements with Telefónica and Liberty Global to leverage high-growth products and services from across the portfolio of those wider shareholder groups.
The company will be led by Daisy Group founder, Matthew Riley, as Chairman and Jo Bertram, Managing Director of Virgin Media O2 Business, as CEO. The management team will combine the best talent from both organisations, with both businesses operating under their separate brands from their current office bases. The dedicated new company will serve the communications and IT needs of hundreds of thousands of UK businesses – small offices, SMEs, large enterprises, and public sector organisations, as well as indirect partners.
As reported by Virgin Media O2, the deal is value-accretive for all parties and is projected to drive further growth through greater scale, efficiencies, and a combined set of products. The company will have greater scale, expertise, and focus, while boosting digital capabilities, benefitting from Virgin Media O2’s next generation fibre and mobile infrastructure, combined with Daisy’s end-to-end IT and sales management platforms and award-winning customer service.
Lutz Schüler, CEO of Virgin Media O2, said: “Combining Virgin Media O2 Business with Daisy Group is the perfect pairing and creates a new British business connectivity powerhouse and greater competition in the market. For us, it’s a big step forward in our journey to boost B2B growth and provide UK businesses of all sizes with the best digital and connectivity offerings.”
Daisy Group Founder and Chairman, Matthew Riley, commented: “This is a significant milestone in Daisy’s 24-year history. This transformational transaction will revolutionise the telecommunications and IT landscape and create the most comprehensive offering for businesses of all sizes across the UK. Growth is top of the political and business agenda – inextricably linked to this is access to world-class IT and communications infrastructure that is integrated and can scale.”
The transaction is expected to deliver around £600 million of operational synergies on a net present value basis, including integration costs, primarily attributable to cost savings. This equates to a pre-tax annual run-rate of ~£70 million by 2030. According to Virgin Media O2, these synergy benefits are projected to materialise quickly, with more than half of synergies anticipated to be realised within three years of closing.
In connection with the transaction, advisers for Virgin Media O2 and its shareholders include Jefferies as financial adviser and Deloitte supporting on financial due diligence and tax. The transaction is expected to close in early H2 2025, subject to customary regulatory approvals, with further director and management announcements occurring in due course.
The new company will be a significant player in the UK business communications and IT sector, providing a comprehensive range of services to businesses of all sizes. With its greater scale, expertise, and focus, the company is well-positioned to drive digital transformation and provide business customers with an innovative one-stop shop for all their communications and IT needs.
For more information, please contact:
Media enquiries for Daisy Group:
SEC Newgate
e: [email protected]
t: 07876 338339 / 07540 106366
Media enquiries for Virgin Media O2:
e: [email protected]
t: 01753 565656
James Lusher t: 07870 380174
Source: Virgin Media O2
