By Stu Woo
LONDON -- Britain's Vodafone Group PLC has agreed to a nearly $23 billion deal to buy operations in four European countries from John Malone's Liberty Global PLC, a merger that would create one of the continent's biggest telecommunications carriers.
Liberty Global, the world's biggest international cable company, has agreed sell its businesses in Germany, Hungary, Romania and the Czech Republic to Vodafone, the world's second-largest wireless carrier by subscribers behind China Mobile Ltd.
The deal, which is valued at EUR19 billion ($22.5 billion) and would give Liberty Global EUR10.6 billion in cash, would face a possibly lengthy European Union antitrust review. If completed, the merger would create a continental giant selling the industry's holy grail "quad-play" package: cable, internet, wireless and landline-phone service on a single bill.
The deal would represent the latest in a global trend of wireless carriers acquiring cable operations, or vice versa, to offer quad-play packages. Wireless carriers need high-speed cable networks to quickly transmit data to cellular towers for 5G, the coming generation of mobile networks that promise to be fast enough to enable near-instantaneous movie downloads and innovations such as self-driving cars.
Both companies have said they have engaged in various forms of merger talks with each other in recent years, but disagreed over price. Vodafone in February said the two sides were again discussing a potential merger. The difference this time, said Liberty Global Chief Executive Mike Fries in an interview: "We agreed on a price. It's that simple."
Chief Executive Vittorio Colao's strategy has been for Vodafone to be the No. 1 or No. 2 carrier in each of the more than 20 countries where it operates. The company believes being first or second allows Vodafone to differentiate itself through better networks and services, and to justify higher prices.
Liberty Global, which is based in Denver and registered in London, runs cable-focused operations in 12 European countries. Its chairman is Mr. Malone, the billionaire media mogul, who leaves Mr. Fries to run the company.
The deal wouldn't include Liberty Global's businesses in the U.K. and Ireland, which compete with Vodafone's. Mr. Fries said neither side was interested in merging those businesses.
The proposed transaction is likely to face close regulatory scrutiny, as well as stiff opposition from Germany's Deutsche Telekom AG over concerns it would give Vodafone too much power over the country's TV market.
Mr. Fries said he expected European Union regulators to approve the deal, which would close by the second half of 2019. He called Germany a competitive market where Deutsche Telekom controls the business, and that Vodafone's acquisition of Liberty Global's assets there would boost innovation and investment.
A Deutsche Telekom spokesman said Tuesday that the deal would lead to "considerable restrictions for consumers to fear. It will be up to the antitrust authorities to examine the case carefully as soon as it will be announced."
Asked about a potential Liberty Global-Vodafone deal during a February conference call, Deutsche Telekom Chief Executive Timotheus Höttges said he didn't think "this kind of concentration in the cable market can be supported" by regulators. "I think there will be no way that this deal is going to be approved and for us it's completely unacceptable."
--Ben Dummett contributed to this article
Write to Stu Woo at Stu.Woo@wsj.com