Vodafone pays Liberty 1 bln euros for Dutch joint venture

(Adds details, background; Liberty Global Q4 results)

Feb 15 (Reuters) - UK phone network operator Vodafone Plc and John Malone's cable company Liberty Global Plc (NasdaqGS: LBTYA - news) agreed on Monday to combine their operations in the Netherlands for a better footing in the local market.

Vodafone will pay 1 billion euros ($1.12 billion) in cash to Liberty as part of the agreement to combine its mobile operations with Liberty's fiber broadband network Ziggo (Other OTC: ZIGGF - news) in a 50-50 joint venture, the companies said in a statement.

"Together we will be a stronger competitor in the Netherlands", Vodafone Chief Executive Vittorio Colao said in the statement.

Vodafone has faced increasing pressure in national markets from former national telecoms network monopolies like Deutsche Telekom, Telefonica (Amsterdam: TA6.AS - news) , KPN (Amsterdam: KPN.AS - news) and BT , which are able to sell packages of broadband Internet, TV and mobile telecoms services.

U.S (Other OTC: UBGXF - news) .-based Liberty's Ziggo is the largest cable TV operator in the Netherlands, while Vodafone is the second-biggest mobile network operator, behind KPN.

The companies said they would see run-rate savings of 280 million euros per year from the fifth year after the closing of the deal, which they expect towards the end of 2016.

Earlier this month, Vodafone said it was in limited talks with Liberty about a joint venture in the Netherlands, after the companies could not agree on a tie-up or exchange of assets last year, a deal that could have covered as many as seven European markets.

Separately, Liberty also reported total revenue of $4.60 billion in the fourth quarter of 2015, a 3.8 percent drop from a year earlier year. In the Netherlands, the company's revenue rose to $672.6 million, up 19.6 percent from the prior year quarter.

($1 = 0.8951 euros) (Reporting by Ismail Shakil in Bengaluru; Editing by Leslie Adler and Dan Grebler)