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Virgin sold for $16 billion

Liberty Global Inc., the cable TV operator owned by media mogul John Malone, is buying U.K.-based Virgin Media Inc. in a deal valued at $16 billion.

The cash and stock deal announced late Tuesday creates a company that will provide stiffer competition in the U.K. to satellite TV provider BSkyB, in which Malone's rival Rupert Murdoch's News Corp. owns a 40 per cent stake.

Liberty Global and Virgin Media said tie-up will create a broadband communications company covering 47 million homes and with 25 million customers in 14 countries.

Liberty Global has pay-TV operations around the world and is the largest cable operator in most of its 11 European markets.

Liberty Global's CEO Mike Fries said that after the deal, about 80 per cent of the company's revenue will come from five countries: the U.K., Germany, Belgium, Switzerland and the Netherlands. The two companies said they had combined revenue of $16.8 billion last year.

Virgin Media is the second-biggest pay TV company in the U.K. after BSkyB, or British Sky Broadcasting Group PLC. Virgin Group boss Richard Branson, a multibillionaire, like Malone and Murdoch, still holds a minority stake.

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