Virgin Media O2 (VMO2) Business and the Daisy Group have joined forces, forming a new communications and IT powerhouse. This merger positions the combined company as a formidable player in the B2B landscape.
With a customer base of approximately 700,000 and annual revenues hovering around £1.4 billion, the new entity boasts an impressive valuation between £2.5 billion and £3 billion. VMO2 will own a substantial 70% share, while Daisy will retain the remaining 30%.
The collaboration is expected to generate massive cost efficiencies, estimated at £600 million. This will mainly be achieved by tapping into Virgin Media O2’s extensive networks, minimizing duplicate operations, leveraging cross-sell and upsell possibilities, and integrating IT systems. Half of these savings are anticipated within three years.
Lutz Schüler, VMO2 CEO, highlighted the synergy, saying, “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.” The merger will equip the new company with the necessary scale, talent, and infrastructure to drive digital transformation.
Upon completion, Matthew Riley, founder of Daisy, will transition to the role of Chair for the merged entity. Meanwhile, Jo Bertram from VMO2 Business will take over as CEO, ensuring smooth operational management.
However, the deal is subject to scrutiny by the Competition and Markets Authority, although insiders are optimistic about securing approval without much fuss. The successful conclusion of this deal is anticipated by early H2 this year.
