Daisy Group will hold a 30% stake in the new company, which will be led by Matthew Riley as chairman and Jo Bertram as CEO.

This strategic merger is designed to streamline operations and position the new company for profitability and growth in a rapidly evolving market.

Matthew Riley described the merger as a transformational transaction that will revolutionize the telecommunications and IT landscape for UK businesses.

This new entity is positioned to compete directly with BT Business, the largest provider of IT connectivity services for enterprises in the UK.

The new venture aims to provide a diverse range of connectivity solutions and managed services, including cloud-based tools, 5G Private Networks, IoT connectivity, and security solutions.

The merger is expected to generate significant operational synergies, with projected cost savings of around £600 million, primarily through efficiency improvements and reduced duplicated costs.

By 2030, the merger is anticipated to achieve a pre-tax annual run-rate of approximately £70 million, with over half of the savings expected within the first three years.

With pro forma revenues estimated at around £1.4 billion, the new entity is set to serve hundreds of thousands of UK businesses and generate an adjusted EBITDA of £150 million.

Matthew Riley acknowledged the potential for significant cost savings through the integration of Virgin Media O2's B2B operations but noted that it could impact Daisy's 1,400 employees.

The merger aims to create a comprehensive service offering for UK businesses, combining infrastructure, talent, and innovative products to meet diverse customer needs.

The transaction will be financed through a secured intercompany loan from Virgin Media O2 and debt from Daisy Group, with an expected closing date in early Q3 2025, pending regulatory approvals.

Virgin Media O2 and Daisy Group are merging their B2B operations to create a new entity focused on enhancing communications and IT services for UK businesses.