Liberty Global, the US-based cable television operator controlled by the billionaire media mogul John Malone, is buying Germany’s number number two cable operator Unitymedia for $3 billion, giving it access to Europe’s largest market.

Liberty Global said it will pay $3.7 billion in cash and assume $2.2 billion in debt from Unitymedia, which is owned by a group of shareholders led by BC Partners of London and Apollo Management of New York.

The deal marks the latest move by Mr Malone, 68, a cable pioneer who has helped shape the industry with a string of spectacular deals over the last three decades. He has been interested in the German market for some time, but an attempt to buy Deutsche Telekom’s cable television network was blocked by regulators in 2002.

With Unitymedia he will get the largest cable operator in the states of North Rhine in North Rhine-Westphalia and Hesse, two of Germany's most densely populated and prosperous states covering ten of Germany's biggest cities, including Cologne, Düsseldorf and Frankfurt.

The company, based in Cologne, has just under five million subscribers and potential coverage of about nine million homes.

Mike Fries, chief executive of Liberty Global, said the addition of Unitymedia would increase the company’s European presence and add significant scale to its global operations.

“We are excited about this transaction as it complements our existing European footprint and has significant untapped growth potential in one of the fastest growing cable markets in Europe,” he said.

He added said that Unitymedia suited Liberty Global because it had an upgraded network, an experienced management team and a good product offering. He expects the companies to benefit from synergies in procurement and network operations.

Unitymedia said the deal is expected to close in the first half of 2010, subject to regulatory approvals, and will increase customers' access to new technology. It said: “With LGI's backing, Unitymedia will become an even stronger competitive force.”

Liberty Global is already active in ten European markets including Austria, Belgium, The Netherlands and Slovakia and is connected to nearly 12 million customer households. Its other main international operations are in Japan, Chile and Australia.

Unitymedia had been planning a €500 million stock sale as recently as a month ago. Andrew Newington, a partner at BC Partners, said: “Liberty, which had been watching us closely and had been thinking about this deal for many years, approached us with a bid in the last two weeks and we came to an agreement in the very early hours of the morning.”

In addition to being chairman of Liberty Global, Mr Malone is also chair of Liberty Media, a cable tv, satellite and investment company with holdings in North America and Europe, which owns QVC home-shopping channel as well as the Starz pay-movie channel.

Liberty Global was formed in 2005 when Mr Malone broke up Liberty Media, spinning off its international interests into a separate company. Although based in Colorado, it operates largely outside the US.

Shares of Liberty Global, which trade on the Nasdaq, were flat at $23.56 following the news.

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