The board of Italian company Autostrade has approved a merger with Spain's Abertis to create the world's largest toll road operator.
Autostrade said the €25 billion deal saw a one-for-one share swap and an extraordinary dividend of €3.75 per share for its shareholders.
The headquarters of the merged entity will be in Barcelona and the first chief executive will be Salvador Alemany, the present Abertis CEO.
A source close to the talks said the merged group would be called Abertis and be listed in Milan and Madrid. Management will be equally split between Italy and Spain.
The companies aim to complete their merger by the end of 2006, and the merged group would have proforma 2005 revenues of €6 billion with earnings before interest, tax, depreciation and amortisation (EBITDA) of €3.8 billion.
Its total debt is projected at €22 billion, or 5.8 times EBITDA.
Autostrade boss Gros Pietro and Abertis chief executive Mr Alemany spoke about a merger a year ago, but said it was a medium-to-long term possibility, and news that a deal was imminent came as a surprise to industry watchers.