The logo of French telecom operator Orange is seen outside a store in Levallois-Perret near Paris, France, January 26, 2022.
The logo of French telecom operator Orange is seen outside a store in Levallois-Perret near Paris, France, January 26, 2022. Reuters / SARAH MEYSSONNIER

Orange and MasMovil have signed a binding agreement to combine their operations in Spain in a deal valuing the merged entity at close to $19 billion, the two telecoms firms said in a statement on Saturday.

The merger, which follows exclusive talks that began in early March, will create the second-biggest telecoms operator in the country behind Telefonica.

It is also aimed at easing competition that has hit Orange's sales and margins, prompting it to restructure its Spanish activities and layoffs hundreds of employees.

The merger in Spain is based on an enterprise value of 18.6 billion euros ($19 billion), the companies said in the statement, including 10.9 billion for MasMovil and 7.8 billion for Orange Spain.

It is subject to approval from antitrust authorities, they added, and is expected to close in the second-half of 2023 "at the latest".

($1 = 0.9794 euros)