Liberty Global has agreed to merge its Virgin Media cable company with the O2 mobile business owned by Spain's Telefonica to create a major new force in the British telecoms market.

The companies said on Thursday that O2 would be valued at £12.7 billion (€17.9 billion) and Virgin Media at £18.7 billion, both on a total enterprise value basis.

Under the deal, O2 is to be transferred into the joint venture on a debt-free basis, while Virgin Media to be contributed with £11.3 billion of net debt and debt-like items, the companies said in a joint statement.

The transaction is expected to close in the middle of 2021, once it has received all the required approvals. – Reuters