Liberty Global to buy Virgin Media for $23.3bn
US billionaire John
Malone's cable group, Liberty Global, has agreed to buy the UK's Virgin
Media in a cash and stock deal worth $23.3bn (£15bn).
The deal, subject to shareholder and regulatory approval, puts Mr Malone in direct competition with Rupert Murdoch, whose media empire owns 39% of BSkyB.
Liberty Global already has operations in various European countries including Germany and Belgium.
"Adding Virgin Media to our large and growing European operations is a natural extension of the value creation strategy we've been successfully using for over seven years," said Mike Fries, chief executive of Liberty Global.
Alongside the announcement of the deal, Virgin Media reported its operating profit rose nearly 30% to £699.1m last year.
It said it added a record 88,700 new customers to its cable business during the year.
Shares jump
Neil Berkett, chief executive of Virgin Media, said: "The combined company will be able to grow faster and deliver enhanced returns by capitalising on the exciting opportunities that the digital revolution presents, both in the UK and across Europe."
Virgin Media was created from the merger of NTL and Telewest, and Sir Richard Branson's Virgin Mobile in 2006.
As part of that deal Sir Richard retained a 3% stake in the company, which has a 30-year brand licensing agreement with his Virgin Group.
Mr Malone, who is the chairman of Liberty Global, clashed with News Corp's Mr Murdoch in 2007 when the two companies vied for control of DirecTV Group, the largest US satellite TV broadcaster.
BSkyB leads the UK pay-TV market with 10.7 million customers compared with Virgin Media's 4.9 million.
Virgin Media's main listing is in the US on the Nasdaq technology stock exchange, where its shares jumped 17.9% on Tuesday amid speculation that a deal was imminent.
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