Telefonica and Liberty Global have confirmed that Virgin Media CEO Lutz Schüler will be chief executive of the planned joint venture between their UK subsidiaries.

The merger between O2 and Virgin Media is expected to go through later this year, subject to approval from the UK Commissions and Markets Authority (CMA), creating an £11 billion communications giant with 40 million broadband, landline, television, and mobile subscribers.

Schüler joined Virgin Media from Liberty’s German cable business Unitymedia in 2018, first as COO and then CEO from June 2019. He was also COO of O2 in Germany between 1998 and 2010 during a 27-year career in the industry.

Patricia Cobian, a 15-year veteran of Telefonica UK and who has been O2 CFO since 2016, will perform the same role at the enlarged company.

“Lutz and Patricia are the right leaders to deliver on our ambition to create the UK’s national connectivity champion,” said Liberty Global CEO Mike Fries and Telefonica CEO José Maria Alvarez-Pallete Lopez.

“Together they will build a strong, diverse and dynamic team that will bring more choice, more value and world-class innovation to over 46 million fixed and mobile customers and the broader consumer and enterprise market.

“Lutz is a unique talent and a perfect fit for the new combined company. He has extensive experience in fixed and mobile and a fantastic track record at both Liberty and Telefonica driving transformation and growth. Together, Virgin Media and O2 will need to quickly capitalize on strategic opportunities in network expansion, digitalization, convergence, 5G and video – all areas where Lutz has a strong background and a clear vision.

“I’m both humbled and proud to be appointed CEO of this powerful combination between Virgin Media and O2, and I’m excited that we are getting closer to realizing our vision of creating a true connectivity champion in the UK,” added Schüler.

Once the deal is concluded, O2 CEO Mark Evans will leave the company. Evans was appointed in 2016 following the failed merger with Three and has engineered a turnaround at the operator, disproving theories that a mobile-only player couldn’t thrive in the UK market.

Both Schüler and Alvarez-Pallete Lopez paid tribute to Evans, recognising his achievements following such a period of uncertainty.

“Since his appointment in 2016, the business has established itself as the UK’s number one network by scale and customer satisfaction and delivered five consecutive years of profit growth,” said the Telefonica CEO. “Valuation grew by £3bn, making this deal possible. He has also played an instrumental role for the Telefónica Group and our strategy. Mark will remain in his post until completion.”

Evans added: “I am proud to have served Telefonica, O2, its employees and customers, especially as CEO over the last five years, and have enjoyed the journey immensely. It has been both a personal and professional honour to have established O2 as the UK’s number one mobile network and most compelling brand.”

The combination of O2’s mobile infrastructure and Virgin Media’s cable network would immediately create one of Europe’s largest telecoms organisations. Consolidation would also result in £6.2 billion in savings and provide the scale and capability to rival BT and Vodafone in the field of converged networking services.

Parent companies Liberty Global and Telefonica have pledged to create 4,000 jobs and 1,000 apprenticeships if they receive regulatory approval and have committed to increase the combined firm’s gigabit broadband footprint by an additional one million premises, bringing the total figure to 16 million, within 12 months of the merger.

There are also pledges to add a further seven million homes to ‘gigabit networks’ and to cover more than 100 towns and cities by the end of 2021.

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