France’s two satellite pay-television companies, Canal Plus and TPS, are to merge.
The new group will be controlled by Vivendi Universal which will own 85% of the combined firm.
TF1, France’s biggest TV channel, and another TV station M6 will swap their stakes in TPS for a 15% holding in the new company.
TF1 and M6 have agreed to remain shareholders for at least three years, they said in a statement.
They will then have an option to sell their combined 15% shareholding for just over one billion euros.
That puts a valuation of 7.5 billion euros on the new group.
This deal will end a fierce price war between Canal Plus and TPS and allow them to join forces to acquire costly football and film broadcasting rights.
They will also be better placed to compete for pay-TV subscribers against telecoms groups and cable operators.