European IT and telecoms funder Econocom has begun discussions of a potential merger with IT and infrastructure firm Osiatis.

The deal would give the resultant company almost €1.9bn in revenue with a workforce of over 8,000 people in 20 countries. Osiatis currently employs 4,600 people and earned a €309m profit in 2012, up 10.4% on the previous year.

In a statement, Econocom said the deal would "strengthen" the group’s activities in three "strategic zones": France, Southern Europe and Benelux, as well as develop its European presence and support growth in Latin America.

Econocom will buy Osiatis’ shares at the rate of one Econocom share plus €4, for a combined value of €10, to a total of 52.2% of the company’s capital. This represents the securities held by Osiatis chairman Walter Butler, major shareholder Robert Aydabirian and by managers Jean Maurice Fritsch and Bruno Grossi.

Econocom chairman Jean Louis Bouchard will remain majority shareholder of Econocom Group, and Walter Butler will become a major shareholder with 6% of the combined company.

The deal should be finalised by the end of August, subject to consultation with employees’ representative bodies and authorisation from competition authorities. Econocom would then submit a public tender for all of Osiatis’ shares, and would also reserve its right to submit a squeeze-out following the tender.

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Bouchard said the merger would be a "milestone" for the group, allowing it to strengthen its position as a "key player in the integration and financing of digital solutions for our customers." It would also "enhance the new group’s resources so that it may take advantage of the tremendous boom expected from digital solutions," he said.

Butler said he saw the deal as "the continuation of the success Osiatis has enjoyed over the past fifteen years" and added it would create "a new European leader with significant growth potential."