TV channels Telecinco and Cuatro are to merge and form a new company in which Telecinco will have 81.7% share and Prisa 18.3%.
Mediaset, who control the group, are also acquiring a 22% stake in Digital+ in a deal valued at €1,050 million.
To finance the merger, Telecinco will increase its capital by €500 million with preferential subscription rights.