Carphone Warehouse is to buy the UK assets of Italian internet service provider Tiscali for £236m. The deal, which is expected to be completed by the end of June, will create the UK’s largest home broadband provider with 4.25m subscribers.
Tiscali had previously been in talks with BSkyB, but negotiations broke down earlier this year.
Carphone Warehouse currently provides broadband services under its TalkTalk brand and also owns AOL UK.
Carphone chief executive Charles Dunstone said that the company would eventually just have a single brand but added that Tiscali e-mail addresses would survive.
“We know the business well and the fit with TalkTalk is perfect,” Mr Dunstone said.
Completion of the deal will give TalkTalk more than 25% of the residential broadband market.
Carphone expects it to boost its earnings by 10% in the next year.
Shares in Carphone Warehouse were up 3.8% by midmorning.
Tiscali shares, which were earlier suspended in Italy pending the statement, were up 8%.