UPDATE: EU Approves Liberty Global, Virgin Media Deal

(Adds Liberty spokesman on majority approval)

By Vanessa Mock

BRUSSELS--Europe's biggest cable operator Liberty Global Inc (LBTYA) received the green light Monday for its 17.2 billion euros ($22.5 billion) acquisition of Virgin Media Inc., the U.K.'s second largest pay-TV operator, after the European Union said the acquisition raised no competition concerns.

Market analysts said the Virgin Media deal will likely reinforce Liberty Global's challenge against BSkyB, the UK.'s top pay-TV provider, owned by Rupert Murdoch. News Corp. (NWS), which owns The Wall Street Journal, is BSkyB's largest shareholder, with a 39.1% stake.

The European Commission, which acts as the EU's antitrust watchdog, said the companies operate cable networks in different EU countries, and that the merged entity would have only a limited market position in the wholesale of TV channels in the U.K. and Ireland.

Liberty Global said the transaction was still subject to majority approval from both shareholders. "The respective shareholder meetings, as well as the closing of the transaction, are expected to occur in the second quarter of 2013," said Marcus Smith, a spokesman for the company.

In its review, the commission said it had looked into the TV content acquisition sector in the U.K., Ireland and the European Economic Area as a whole. It also investigated the vertical link between Liberty Global's activities in the wholesale supply of pay-TV channels, it said.

"It is unlikely that the merged entity would shut out competing TV channel broadcasters from access to the retail Pay TV market, given the number of alternative distribution platforms to Virgin Media's cable network (e.g. BSkyB's satellite platform) and the importance of offering a large variety of TV channels in order to attract Pay TV subscribers," the commission said in its statement.

Liberty Global provides TV, broadband internet and telephony services in 10 EU countries but not in the U.K. Its brands include Telenet Group Holding NV (TLGHY), Unitymedia and UPC. Liberty Global also produces and supplies a number of TV channels to TV operators in the U.K. through its content division Chellomedia.

Virgin Media owns and operates a cable network in the U.K., offering pay-TV, broadband internet and telephony services.

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