Italian telecommunications service provider Tiscali SpA and Linkem SpA's retail unit have reached a merger deal to create Italy's fifth largest fixed network operator, the companies announced Dec. 30.

The companies' respective boards approved an exchange ratio of 5.0975 Tiscali shares for every €1 of Linkem Retail share capital held by Linkem, with Linkem expected to own 62% of Tiscali's share capital.

The boards will also propose a reverse stock split of Tiscali shares with a ratio of 1:100 at the shareholders' meeting in March.

The deal also includes a shareholders' agreement that will see Amsicora Srl owning a stake of approximately 3.7% in Tiscali, of which 1.03% will be loaned to Nice & Green SA, and Renato Soru owning a stake of approximately 2.09% in Tiscali.

The transaction is expected to close within the first half of 2022.