Orange has made a €3.4 billion offer for Spanish telco Jazztel, as it moves to strengthen its fixed line services in the country.
If the deal goes ahead, it will create the second biggest fixed line player in Spain and Orange said it will make it easier to offer customers converged services.
The operator said: "In an economic context that has continued to recover, this operation will enable Orange to accelerate its growth in a highly-competitive market."
The offer values Jazztel at a 34 percent premium. In order for the deal to go ahead, Orange must get approval from at least 50.01 percent of its shareholders. The operator's lead shareholder has already agreed to the deal, as have fellow executive board members José Miguel Garcia Fernandez, Jazztel CEO, and Mr José Ortiz Martinez, its General Secretary.
Orange said the deal will generate synergies worth up to €1.3 billion thanks to operational savings and investments in networks.
According to its latest set of financial results, Jazztel has revenues of €295 million, up 15 percent on the previous year.
It also has 1.48 million broadband customers and 1.54 million mobile customers, who use Orange's network.
The French operator will fund the deal through a combination of securities and bonds.
However, the move for Jazztel is likely to affect the Spanish operator's bid for Yoigo. Jazztel said last week that it was in initial talks with its owner Teliasonera about a potential takeover.