/STOCKS: Per the FT: "Liberty Global and.........>

UK: /STOCKS: Per the FT: "Liberty Global and Telefonica have reached an

agreement to combine their British operations O2 and Virgin Media, in a tie-up

worth more than GBP24bn that is set to reshape the UK's telecoms market, said

people with direct knowledge of the matter. The two companies are expected to

announce the deal on Thursday after five months of negotiations between the

Spanish telecoms company and the US group controlled by billionaire John Malone,

the people added. Under the terms of the agreement, the companies would have

equal ownership of O2 and Virgin Media, the people said, adding that Telefonica

would receive GBP5.5bn in cash to help it reduce its heavy debt position.

Liberty Global would also take GBP1.5bn in cash after splitting out Virgin

Media's Irish business, which would not be included in the merger with O2."

- A deal had been in the offing.