It is aimed at bolstering the 20 year old channel's digital presence and appealing to the online retailer's younger clientele - or those more comfortable at clicking the keypad to make purchases.
The transaction will consists of cash and shares and Liberty has offered US$18.75 per share - $9.375 in cash and 0.3098 newly issued Liberty shares - representing a premium of around 49% to Zulily's Friday closing price.
The deal will reportedly create a company with combined revenue of more than US$10 billion and 230 million products shipped globally to 19 million customers in 85 countries.
Zulily. in which e-commerce giant Alibaba (NASDAQ:BABA) has a 9% stake, has a network of 10,000 sales partners and offers thousands of products. Around 56% of its orders are placed over mobile devices.
Zulily will keep its headquarters in Seattle and Darrell Cavens remains as chief executive.
Both company boards have approved the deal, which is targeted to close in the fourth quarter.
Shares of Zulily's are up over 49% at the time of writing, at US$18.74, while Liberty Interactive Corp's (NASDAQ:QVCA) were unchanged at US$29.8.