By Mauro Orru

 

Liberty Global PLC, Spain's Telefonica SA and financial investment firm InfraVia Capital Partners have agreed to deploy fiber broadband for millions of homes across the U.K. with an investment of roughly 4.5 billion pounds ($5.48 billion).

The companies said in a joint statement Friday that they have agreed to form a joint venture to initially roll out fiber to 5 million homes not currently served by Virgin Media O2's network. The deal also paves the way to include an additional 2 million homes at a later stage.

Liberty Global had agreed to combine its U.K. telecommunications business Virgin Media with Telefonica's O2 in 2020. Virgin Media O2 already committed to upgrading its network of 16 million premises and the latest deal is set to bring its fiber footprint to up to 23 million homes, Liberty Global Chief Executive Mike Fries said.

The deal comes as workers continue to rely on high-speed connectivity at home even after most countries lifted Covid-19 restrictions and people return to offices as companies adapt to hybrid ways of working.

The fiber network will be offering wholesale access to other telecommunications service providers, and Virgin Media O2 will be the anchor client of the joint venture. Liberty Global and Telefonica will retain a combined 50% stake in the joint venture through a holding company, while InfraVia will hold the remaining 50%.

The initial GBP4.5 billion investment covers roll-out costs, connection capital expenses and other related set-up costs. The three partners will make up to GBP1.4 billion in equity commitments.

The joint venture secured GBP3.3 billion in debt financing from a consortium of banks, including a GBP3.1 billion capital expense facility.

The three partners expect to close the deal in the fourth quarter after obtaining regulatory approval.

 

Write to Mauro Orru at mauro.orru@wsj.com; @MauroOrru94

 

(END) Dow Jones Newswires

July 29, 2022 07:33 ET (11:33 GMT)

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