With a merger worth billions in Spain, the telecommunications groups Orange and MasMovil are drawing consequences from the fierce competition between the four providers so far.

The French group Orange and its Spanish partner MasMovil announced on Saturday that both sides would participate equally in the new company worth 18.6 billion euros.

The French company is contributing its Spanish business.

The transaction is expected to be completed in the first half of next year at the latest.

The project requires antitrust approval from the EU Commission, which is usually critical of such mergers.

According to Orange, it has a right of first refusal on the shares in the planned joint venture held by MasMovil.

In the longer term, an IPO for the new company is also possible.

In March, the two groups announced talks about merging their Spanish businesses.

These negotiations have now resulted in a binding agreement.

The merger will create a new landline and mobile communications giant in the fourth-largest EU country in terms of population, which will be able to stand up to the previous market leader and original monopolist Telefonica.

British provider Vodafone would slip to fourth place in Spain.

According to industry experts, however, like its competitors it could benefit from an easing of the price war.

According to the regulatory authority, the Telefonia brand Movistar has held a 28 percent share of the mobile communications market, Orange 23 percent, Vodafone 22 percent and MasMovil 21 percent.

Bitter price battles, high mountains of debt and billions in investments in the 5G expansion are causing problems for telecommunications companies across Europe.

For this reason, consolidation is being considered more and more often in the industry.

Analysts also consider mergers in Italy, Portugal and Great Britain to be possible.

Due to antitrust hurdles, the entire industry should now be anxiously awaiting how the EU Commission will react to Orange and MasMovil's plans in Spain.

The proposed merger will value Orange's Spanish business at €7.8 billion and MasMovil at €10.9 billion.

The joint turnover amounts to more than 7.3 billion euros, the operating profits add up to more than 2.2 billion euros.

Orange's main shareholder is the French state, which holds 23 percent of the shares.

MasMovil is majority owned by financial investors KKR, Providence and Cinven.