Italian internet service provider Tiscali is set to create Europe’s second largest internet company (after T-Online International) by purchasing Dutch ISP World Online International. The combined group will retain the name Tiscali and be based at the Italian firm’s Sardinian headquarters.

The €5.9 billion all-stock deal will see World Online shareholders receiving 0.4353 Tiscali shares per World Online share, leaving them with about 43% of the Italian firm. This represents a premium of around 27% on World Online’s share price at Wednesday’s closing, but is less than half the value of its public offering in March.

Between them the two companies have around 6 million subscribers with a presence in fifteen countries. This is not enough for Renato Soru, Tiscali founder and ceo of the new company, who declares: “We want to create the biggest internet company in Europe.”

The move is expected to save up to €600 million over the next two years.

News source: Wall Street Journal