PARIS: French telecoms group Orange and Spain’s MasMovil said on Tuesday they had entered into exclusive talks to combine their businesses in Spain, a deal that would reduce the number of operators in the ultra-competitive Spanish market.

The new entity would take the form of a 50-50 joint venture with a combined enterprise value of 19.6 billion euros ($21.28 billion), the two companies said in a statement.

The combined entity would generate revenue of more than 7.5 billion euros ($8.14 billion). Annual synergies should reach an annual rate of 450 million euros from the third year after closing.

“I look forward to creating this joint-venture with MasMovil, building on our existing successful collaboration, to become a stronger player capable of making the investments required to develop the Spanish market,” Orange CEO Stephane Richard said.

Top officials at Spanish carriers have repeatedly called for market consolidation to reduce competition and boost operators’ profitability at a time they need cash to invest into the rollout of 5G mobile telecom infrastructure.