 Liberty Global and Telefonica have agreed to merge their British businesses in a 38 billion deal that will create a powerhouse in mobile and broadband to take on market leader BT. In the biggest shake-up of the British telecoms market for five years, the deal will bring together the biggest cable TV provider in Libertys Virgin Media with Telefonicas O2, the second-largest mobile operator. The tie-up mirrors a succession of European deals struck by Libertys billionaire founder John Malone to create one-stop shops for mobile and broadband. 