Liberty Global, Telefónica agree 24 billion pound deal to merge UK groups - FT

(Reuters) - The British units of Liberty Global Plc <LBTYA.O> and Telefónica SA <TEF.MC> will merge in a deal worth 24 billion pounds, the Financial Times reported on Thursday.

The companies are expected to announce the deal to merge Telefonica's British mobile operator O2 and Liberty's Virgin Cable network company on Thursday after five months of negotiations, the newspaper said citing sources.

The parent companies, which expect to achieve 700 million pounds worth of synergies by merging, would have equal ownership of the combined entity, the report said, adding that Telefónica would receive 5.5 billion pounds in cash to help it reduce its heavy debt.

Liberty Global and Telefónica did not immediately respond to Reuters requests for comment.

Liberty Global would take 1.5 billion pounds in cash after splitting out Virgin Media's Irish business, which would not be included in the merger with O2, according to the report.

Spain's Telefonica had confirmed earlier this week that it was in talks with billionaire John Malone's Liberty Global over a possible merger of their respective businesses in Britain.

The deal would allow Telefonica to squeeze cash from O2 and keep a presence in Britain, while Virgin would gain access to its own wireless network, saving the money it has spent until now on leasing capacity for its mobile operations.

(Reporting by Juby Babu in Bengaluru; Editing by Subhranshu Sahu)