FRANKFURT (AP) – U.S. cable television operator Liberty Global Inc. said Friday it has agreed to pay euro2 billion ($3 billion) for all of Germany's second-largest cable TV provider, Unitymedia GmbH.

Liberty Global, based in Englewood, Colo., said it would acquire all of the shares from parent company Unity Media S.C.A., which is owned by a group of shareholders led by private equity companies Apollo and BC partners . Liberty will also take on euro1.5 billion ($2.2 billion) in debt.

The deal, approved by Unitymedia's board, could still face transaction costs.

Liberty Global's chairman is John Malone, a longtime player in the cable television industry. Malone is also the chairman of Liberty Media Corp. and the DirecTV Group Inc.

Malone has been interested in the German market for some time. In 2001, he attempted to buy Deutsche Telekom AG's cable television assets.

Unitymedia, based in Cologne, has potential coverage of about 9 million homes and covers 10 of Germany's biggest cities, including Cologne, Duesseldorf and Frankfurt.

It had about 5 million subscribers at the end of September and is the biggest cable television operator in North Rhine-Westphalia and Hesse, two of Germany's most densely populated and prosperous states.

"We are excited about this transaction, as it complements our existing European footprint and has significant untapped growth potential in one of the fastest growing cable markets in Europe," Liberty Global CEO Mike Fries said.

"The addition of Unitymedia not only enhances our European presence, but adds significant scale to our global operations," he added.

Fries said that Unitymedia suited Liberty Global because of its upgraded network, an experienced management team and a good product offering. He expects the companies to benefit from synergies in procurement and network operations.

Unitymedia said the deal is expected to close in the first half of 2010, subject to regulatory approvals, and will increase customers' access to new technology.

"With LGI's backing, Unitymedia will become an even stronger competitive force," it said.

Liberty Global is already active in 10 European markets, including Austria, Belgium, the Netherlands and Slovakia and is connected to nearly 12 million customer households. Its other main international operations are in Japan, Chile and Australia.

Shares of Liberty Global, which trade on the Nasdaq, fell more than 8 percent to $21.04 after the announcement.