Liberty’s loss making Ziggo broadband operation will combine with Vodafone’s mobile network in Holland, to create one company.
The enlarged firm is expected to supply 15mln “revenue generating units” including set-top boxes, internet access, and landline and mobile connections.
Speculation was rife that Vodafone, the world’s second-largest mobile operator, and Liberty Global, which owns Virgin Media, were in talks for a merger, but it seems talks were limited to their Dutch operations.
Vodafone will pay €1bn ($1.12bn) to Liberty as part of the deal that will value the joint venture at about €3.5bn ($3.91bn) in terms of combined revenue and capital expenditure, after integration costs.
Mike Fries, chief executive of Liberty, said: “By combining our best-in-class broadband and video network in the Netherlands with Vodafone's market-leading 4G wireless platform, we are creating a new national champion for Dutch consumers.”
It was announced as Liberty reported a 5% rise in operating profit to $2.3bn in the year to December 31 from the previous 12 months.