Virgin Media on Wednesday confirmed it will merge with US billionaire John Malone's Liberty Global.
Liberty will buy Virgin in a cash and stock deal worth $23.3bn to create the UK's second biggest pay-TV business after BskyB. It is equal to $47.87 per Virgin share.
The transaction puts Malone in direct competition with long-time rival Rupert Murdoch, who owns 39% of BskyB.
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The merger will allow Liberty to expand its reach in Europe as it goes head-to-head with its major competitor.
Together the companies would have 25m customers in 14 countries.
Liberty's Chief Executive Officer Mike Fries said roughly 80% of the group's revenue will come from the UK, Germany, Belgium, Switzerland and the Netherlands following the deal.
"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," he said.
"Virgin Media will add significant scale and a first-class management team in Europe's largest and most dynamic media and communications market."
The announcement was made alongside Virgin's latest financial results. The cable operator said operating income for the year to the end of December was £699m - up nearly 30% from £540m in 2011.
About 5.0m UK households subscribe to Virgin's broadband, television and landline services and it has around 3.0m mobile phone customers in Britain.
Cable customers have increased by 88,700 over the last year, according to the latest results from Virgin - in which Sir Richard Branson owns a 3.0% stake.
"Like all of our strategic acquisitions we expect this combination to yield meaningful operating and capex synergies of approximately $180m per year upon full integration," Fries said.
"But just as importantly, Virgin Media's market leading innovation and product expertise, particularly in mobile and B2B, will accelerate our own development of these business segments."
He said Virgin would complement Liberty's organic revenue and operating cash flow growth.
Virgin's Chief Executive Officer, Neil Berkett, added: "Over the past six years, Virgin Media has transformed the digital experience of millions of customers, catalysed a deep-rooted change in the UK's digital landscape and delivered impressive growth and returns for our shareholders.
"I'm confident that this deal will help us to build on this legacy. Virgin Media and Liberty Global have a shared ambition, focus on operational excellence and commitment to driving shareholder value. The combined company will be able to grow faster and deliver enhanced returns by capitalizing on the exciting opportunities that the digital revolution presents, both in the UK and across Europe."
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