Englewood, Col.-based Liberty will offer Virgin Media shareholders $17.50 in cash, 0.2582 Liberty Series A shares and 0.1928 Liberty Series C shares for each Virgin Media share. The offer reflects a 24$% premium to the Hook, England company's Monday closing price. Virgin Media's shares had already almost doubled in the past 12 months.

The enlarged company will serve 47 million households across 14 countries, with about 80% of Liberty's revenue coming from the U.K., Germany, Belgium, Switzerland and the Netherlands.

Liberty said it would redomicile from Delaware to the U.K. as part of the transaction and become a subsidiary of a U.K. plc.

"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 Liberty President and CEO Mike Fries in a statement.

Suggesting that further deals may be in the enlarged company's sights, Virgin Media CEO Neil Berkett added:

"The combined company will be able to grow faster and deliver enhanced returns by capitalizing on the exciting opportunities that the digital revolution presents, both in the U.K. and across Europe."

Liberty is paying $16 billion for Virgin Media's equity. It put the operating cash flow multiple of the deal at 8.8 times and said it expects to generate $180 million in synergies from the transaction.

It also said it would expand a long-running share buyback program, handing out another $3.5 billion within two years of the Virgin Media takeover closing.

The announcement comes as the European media landscape shifts significantly. Last week Germany's Bertelsmann AG, Europe's biggest media company, said it was considering selling up to 17.3% of its RTL Group SA broadcaster to raise cash for purchases -- the stake is worth about €2 billion ($3 billion).

And private equity heavyweights Permira and Kohlberg Kravis Roberts & Co. LP have tapped JPMorgan Chase & Co. to sell their 53% investment in Germany pay-TV company ProSiebenSat.1 Media AG.

Liberty itself has been snapping up European cable assets as consumers seek the faster Internet speeds and the bundled phone, Internet and TV products afforded by cable infrastructure. The company is working to buy Tele Columbus AG, which is worth €618 million, from creditors to bulk up in Germany, where it's already bought two other providers.

Liberty opted to target Virgin Media rather than another company on mainland Europe amid regulatory hurdles there. Other potential targets were Kabel Deutschland GmbH in Germany and Ziggo NV in the Netherlands. But German competition regulators are resisting attempts to further link German cable companies and new regulations that require Ziggo to open its network to outsiders likely scared away Liberty.

Last month Liberty decided not to lift its buyout offer for the outstanding 49.6% of Belgian unit Telenet Group Holding BV, probably because Virgin Media was already in its sights. It reeled in just 7.9% of the target's shares after directors dismissed the bid as too low.

LionTree LLC's Aryeh Bourkoff, Ehren Stenzler, Matt Feldman, Kevin Hong and Adam Judd advised Liberty Global. Credit Suisse Group also acted as financial advisor and handled associated debt financing - Liberty will add another $3 billion to Virgin Media's borrowings as part of the deal.

Shearman & Sterling LLP's George Casey, Eliza Swann, Jeremy Kutner, Alan Goudiss, Laurence Bambino and Doreen Lilienfeld ; and Ropes & Gray LLP served as legal counsel to Liberty Global. Goldman, Sachs & Co. and JPMorgan's David Lomer and Ben Berinstein advised Virgin Media and Fried, Frank, Harris, Shriver & Jacobson LLP and Milbank, Tweed, Hadley & McCloy LLP served as legal counsel.

Shareholder meetings to vote on the deal are expected in the second quarter. Malone controls 35% of Liberty Media.

Chris Nolter contributed to this report