United Pan-European Communications, the independent cable company boasting the largest number of subscribers in Europe, yesterday completed the merger of its internet and digital TV arms.

The new division, which keeps the UPC Media tag of the TV unit, may also be spun-off from the group and made financially independent, said the company.

The merger, designed to produce “significant” reductions in costs, has been on the cards since the collapse of talks to merge UPC’s internet service Chello with Excite@Home’s non-US assets [WAMN: 06-Dec-00].

UPC explained that the move was “driven by strong evidence that the businesses had become increasingly inter-dependent and over-lapping,” adding that it could help attract potential partners in content and programme making.

Although Manuel Kohnstamm, managing director of corporate affairs, insisted UPC is “not yet at the stage” of cutting jobs, the merger has already claimed one victim. As expected, Chello chief executive Roger Lynch has “decided to pursue other opportunities outside the group,” euphemised UPC.

The new division will be overseen by chief executive Andrew Barron, who moves from managing director of UPC Media.

News source: Financial Times