Virgin Media has confirmed it is in talks with Liberty Global regarding a potential buyout by the international media company of the UK cable and mobile operator. This would be the US companys biggest move into the UK media industry yet.

The transaction would pit the companys CEO, US media mogul John Malone, who once owned a considerable stake in News Corp, back in direct competition with his former business associate, Rupert Murdoch.

Adrian Drury, principal analyst at Ovum believes that, if the buyout went ahead, it would represent the largest shake-up of the telecoms sector since the merger of T-Mobile and Orange. “Depending on how Malone might chose to leverage the Virgin Mobile asset, it may also spill over in consumer mobile services,” said Drury. “Malone will bring the operational smarts from cable operations in 13 markets, multi-territory leverage with the major studios and sports federations, plus its recently launched Horizon next generation pay-TV and multi-screen platform, now rolling out across its European operations.”

Russell Holden, a partner at Taylor Wessing law firm, said Libertys existing revenues of around $10bn would help Virgin to speed up deployment of super-broadband. “If successful, a faster roll-out of superfast broadband would make the provision of the on demand TV service more viable to a wider audience and should help them to continue to increase market share,” he said. “The timing is also very interesting – Virgins share price is double the level of last May given its success over the last 12 months, so a bid now will be significantly more expensive than it would have been this time last year.”

Update: Liberty has since confirmed that it has agreed to buy Virgin Media, for the sum of $23.3bn (£14.8bn). It hasnt yet revealed its business plans regarding Virgins MVNO.