updated 1/18/2005 11:26:51 AM ET 2005-01-18T16:26:51

Cable entrepreneur John C. Malone plans to further streamline his holdings by offering to buy the other half of UnitedGlobalCom Inc. that he doesn't already own, creating one of the largest owners of broadband communications systems outside the United States.

Malone's Liberty Media International Inc. on Tuesday offered to purchase the remaining stock in UGC that it doesn't own — about 47 percent — in a transaction that would value UnitedGlobalCom at $7.4 billion.

The merged company would be called Liberty Global Inc., with UGC and Liberty Media International as wholly-owned subsidiaries.

Malone, Liberty Media International's president and chief executive officer, would be chairman of the new company. Michael Fries, UGC's president and CEO, would assume the same positions in the new company.

Under the proposed deal, each issued and outstanding share of Denver-based UGC common stock would be exchanged into 0.2155 of a share of Series A common stock of Liberty Global. That would exclude shares owned by the Internet provider, LMI or its subsidiaries.

Each issued and outstanding share of LMI common stock was to be converted into one share of the same series of the new holding company's common stock.

The deal, negotiated and approved by a special committee of UGC's independent directors, is subject to shareholder approval at both companies and regulatory review. It is expected to close in the second quarter.

"The benefits of this transaction to both sets of shareholders are substantial. Liberty Global will have one of the strongest balance sheets in the industry, additional cash to pursue acquisitions and a simplified and more liquid trading market for its stock," Fries said in a statement.

Liberty Media International owns interests in broadband distribution and content companies operating mainly in Europe, Asia and Latin America. UGC is a leading international provider of video, voice and broadband Internet services with operations in 15 countries.

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