Liberty Global and Telefonica to combine their U.K. operations

Spain's Telefonica SA and U.S. tycoon John Malone's cable group Liberty Global on Thursday said they will merge their U.K. operations in a 50-50 joint venture. The deal values Spain's O2 at £12.7 billion ($15.6 billion) and Liberty Global's Virgin Media at £18.7 billion ($23 billion), and is expected to deliver synergies of £6.2 billion ($7.6 billion). Both parties will receive net cash proceeds at the close of the deal -- expected in mid 2021 -- after a series of recapitalizations -- £5.7 billion for Telefonica and £1.4 billion for Liberty Global (after an equalization payment to Telefonica of £2.5 billon). The deal, which ends days of speculation, is expected to reshape the U.K telecom industry, creating a competitor to the country's top operator, BT Group, .

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