Reports say that even though Malone and Murdoch have a long history as friends, Murdoch was unaware that Malone was planning to do the deal, which saw him swap non-voting shares as well as paying $693m (£374.2m). It makes Liberty the second-most-influential shareholder in News Corporation after the Murdoch family.
According to a report in the Melbourne Herald Telegraph, a paper owned by News Corp, the company welcomed the move.
"In our view this is another sign of confidence in our company's health and future strategy by Mr Malone," News Corp spokesman Andrew Butcher told the newspaper.
Speculation that Liberty could take a controlling stake in News Corp is tempered by the fact that any takeover would have to be approved by the Australian government because of laws regarding foreign ownership of media companies.
Reports say that Malone has denied he is seeking a seat on the board of News Corp but that he did want to have some voting shares.
Robert Bennett, Liberty Media president and CEO, said in a statement: "News Corp is one of the few truly global media companies and we are very pleased we were able to leverage our substantial equity interest in News Corp into a larger equity and voting stake."
The move pushed shares in News Corp, traded on the Australian Stock Exchange, up by 7% to trade at A$12.34.
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