The deal will create the world's largest broadband company, with 25 million customers in 14 countries. In the UK, it will be the second biggest pay-TV business after BSkyB.
The merger, subject to shareholder and regulatory approval, puts Mr Malone in competition with Rupert Murdoch, whose media empire owns 39% of BSkyB.
Following the deal, about 80% of Liberty Global's revenue will come from five European countries: the UK, Germany, Belgium, Switzerland and the Netherlands.
"Adding Virgin Media to our large and growing European operations is a natural extension of the value creation strategy we've been successfully using for over seven years," said Mike Fries, chief executive of Liberty Global.
Under the terms of the agreement, Virgin Media shareholders will receive $17.50 in cash, 0.2582 Liberty Global Series A shares and 0.1928 Liberty Global Series C shares for each Virgin Media share that they hold.
Source: BBC News
