US cable giant Charter Communications will buy Time Warner Cable in a cash-and-shares deal valued at $78.7 billion (£51.1bn) that will create one of America's largest pay-television and broadband operators.

The mammoth deal comes at a time of great change in the US cable industry as increasing numbers of consumers watch programmes on the internet rather than on TV screens.

The move brings together two of the biggest cable providers in the US market.

As part of the agreement, Charter will also buy smaller cable firm Bright House Networks for more than $10bn (£6.5bn).

Charter will pay $55.76bn (£36.1bn) in cash and shares for Time Warner Cable. It will also pick up Time Warner Cable's long-term debts of over $22.6bn (£14.7bn).

Charter said it will provide $100 (£65) in cash and shares for the business equal to 0.5409 shares of Charter for each outstanding Time Warner Cable share. The transaction values each Time Warner Cable share at about 195.71 US dollars (£127).

Charter, which is backed by US cable tycoon John Malone, said the new firm will reach just under 24 million customers across 41 states.

It added that the scale of the three merged firms would drive new investment, leading to faster broadband speeds, better video products, more high-definition channels and a more affordable phone service.

Charter chief executive Tom Rutledge said: "Put simply, the scale of new Charter, along with the combined talents we can bring to bear, position us to deliver a communications future that will unleash the full power of the two-way, interactive cable network."

The deal comes a month after the largest US cable player, Comcast, with around 27 million customers, abandoned plans to buy Time Warner Cable under pressure from US regulators due to competition concerns.

The deal is a victory for Mr Malone - the so-called "cable cowboy" - over Franco-Israeli billionaire Patrick Drahi, of Luxembourg-based cable and telecoms firm Altice, which was also reported to be bidding for Time Warner Cable.

The Charter deal is larger than US telecoms giant AT&T's agreement to buy satellite service DirecTV for $48.5bn (£31.5bn) in 2014.

But it falls short of Vodafone's sale of its 45 per cent stake in Verizon Wireless to US rival Verizon Communications in a deal worth $130bn (£85bn), announced in September 2013.