Last checked at 
(Adds details, background)
MADRID, May 4 (Reuters) - Spain's Telefonica SA
confirmed on Monday it has opened talks with billionaire John
Malone's Liberty Global Plc over a possible merger of
the two companies' businesses in Britain.
The talks to merge Telefonica's British mobile operator O2
and Liberty's Virgin Media network company have just started,
the Spanish company said.
"The process started between both parties is in the
negotiation phase, with no guarantee, at this point, of its
precise terms or its probability of success," Telefonica said in
a filing to the Spanish market regulator.
Two sources familiar with the matter told Reuters on Friday
that talks were ongoing.
In a two-paragraph statement on Monday, Telefonica said it
would keep markets informed if a "satisfactory agreement" were
reached.
Telefonica's UK business, which includes O2, generated 7.11
billion euros in revenue in 2019, around 14.7% of the group's
total, and had 34.5 mobile connections on its network.
Virgin Media competes with UK pay-TV market leader Sky,
owned by Comcast, in pay-TV, and with BT, Sky,
TalkTalk and others in broadband.
It had 6 million cable customers and 3.3 million mobile
customers as of the end of 2019.
Telefonica, due to report quarterly earnings on Thursday,
has been weighing options for the mobile business since 2016
when a previous 10.3 billion pound ($12.8 billion) O2 takeover
bid from Three UK, controlled by CK Hutchison Holdings
, was blocked by European antitrust regulators.
A combination of O2 and Virgin Media would reshape Britain's
telecoms industry, leaving Hutchison and Vodafone
without their own fixed-line consumer networks and raising the
pressure on BT.
A deal between Telefonica and Liberty would end uncertainty
around the fate of one Britain's biggest mobile operators after
it was repeatedly touted as a possible candidate for a sale or a
stock listing in recent years.
It would also offer Telefonica a way to partially cash out
from O2 while retaining a presence in Britain, which the company
sees as one of its core markets along with Spain, Germany and
Brazil.
The Spanish company has said last year it plans to raise 2
billion euros ($2.2 billion) in extra revenue by hiving off
parts of its Latin American businesses and focusing on its core
markets.
($1 = 0.8035 pounds)
($1 = 0.9140 euros)
(Reporting by Inti Landauro
Editing by Jason Neely and Keith Weir)
