British cable operator NTL has agreed to buy smaller rival Telewest for about $6 billion.
NTL said today it is paying $23.93 - $16.25 in cash and 0.115 NTL shares - for each Telewest share, confirming reports of the transaction over the weekend.
It is also taking on $3 billion of Telewest debt. Combined, they will have TV, telephone and Internet customers in about five million households compared with nearly eight million for BSkyB. It will also be Britain's second-largest residential telephone company behind BT Group.
The two companies are not expected to face a difficult regulatory path because most of their customers do not overlap and because rival services from the likes of telephone operator BT continue to emerge.
NTL and Telewest said they expect the deal to close in the first quarter of 2006 following approval by regulators and both companies' shareholders.
The deal includes Telewest's Flextech programming arm, which Telewest had put up for sale earlier this year. Telewest and NTL began talks in June over a long-anticipated potential deal.
NTL sought bankruptcy protection in the United States and re-emerged in January 2003, while Telewest underwent a restructuring. Since then, the two companies have been widely expected to merge to compete more effectively with BSkyB and new services such as Freeview, the fast-growing subscription-free digital terrestrial service.