Mobile operator O2 and broadband giant Virgin Media are to merge, creating one of the country’s largest entertainment and telecoms firms.
Liberty Global, which owns Virgin Media, and Spain’s Telefonica, which owns O2, said they had agreed terms for joining forces.
O2 is the UK’s largest phone company with around 34 million users.
Virgin has about six million broadband and cable TV customers and another three million mobile users.
As well as having its own subscribers, O2 provides the network for Tesco Mobile, Giffgaff and Sky Mobile,
The companies said O2 would be valued at £12.7bn and Virgin Media at £18.7bn, both on a total enterprise value basis.
“O2 [is] to be transferred into the joint venture on a debt-free basis, while Virgin Media to be contributed with £11.3bn of net debt and debt-like items,” the firms said in a joint statement.
The tie-up will create a major rival to BT.
Telefonica tried to sell O2 to the owner of Three, CK Hutchison, for £10.3bn in 2015. However, that deal was blocked by the European Commission over concerns that it would have left just three major mobile phone operators in the UK.