US cable giant Liberty Global has confirmed that it will buy the UK's second biggest pay-TV company Virgin Media in a stock and cash merger valued at $23.3 billion (£14.9bn).

The deal, subject to shareholder and regulatory approval, will give Liberty Global a firm foothold in the UK market and put its chairman, US billionaire John Malone, in direct competition with his former partner and long-time rival Rupert Murdoch, whose company News Corp owns 39 percent of BSkyB.

Each Virgin Media share has been valued at $47.87 (£30.61) in combined cash and stock, reflecting a 24% premium to Virgin Media’s closing price on 4 February 2013.

“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, President and CEO of Liberty Global.

“Virgin Media will add significant scale and a first-class management team in Europe's largest and most dynamic media and communications market.”

Liberty already operates in 13 countries, including 11 in Europe, and has 19.6 million subscribers to its digital TV, broadband and telephony products. Its consumer brands include UPC, Unitymedia, Kabel BW, Telenet, and VTR.

It is the second time that Liberty Global has looked at buying Virgin Media, in which Sir Richard Branson still holds a minority stake.

Virgin Media, formed by the merger of NTL, Telewest and Branson's Virgin Mobile in 2006, has approximately 4.9 million subscribers to its pay-TV and broadband and telephony services, as well as around 1.7 million mobile customers.

It also has a business division, Virgin Media Business, which offers services such as secure VPNs, mobile backhaul and business cloud computing, and claims to carry about 35 percent of all business broadband traffic in the UK. 

Fries said that Virgin Media's expertise in mobility and B2B offer significant additional growth potential in key markets.

Virgin Media CEO Neil Berkett added: “The combined company will be able to grow faster and deliver enhanced returns by capitalising on the exciting opportunities that the digital revolution presents, both in the UK and across Europe.”

Alongside the announcement of the deal, Virgin Media reported its total revenue for the last year was up 2.7 percent to £4.1 billion, and operating profit rose 29 percent to £699.1 million.

The company also added 88,700 new customers to its cable business during the period, which is a record for Virgin Media and a significant improvement on the 5,500 added in 2011.