LISBON, July 31 (Reuters) - Portugal's competition authorityapproved a merger between cable TV operator Zon Multimedia and Sonaecom's mobile phone unit Optimus thatwill create the country's second-largest telecoms firm, thecompanies said.
The regulator had said in April that it was looking into thepossibility that the merger could create a duopoly, with theother major player in the market being Portugal Telecom.
Analysts had expected the regulator to approve the deal buthad warned it could take time to make a ruling and compromisethe companies' goal of concluding the merger by September.
"We have been notified of the competition authority'sproject decision stating non-opposition to the consolidationprocess", Zon and Sonaecom said in a statement late on Tuesday.
The merged entity will be controlled by a joint-venturebetween Sonaecom and Isabel dos Santos, daughter of long-servingAngolan President Jose Eduardo dos Santos and the mainshareholder in Zon.
Sonaecom is controlled by conglomerate Sonae, whichis in its turn controlled by tycoon Belmiro Azevedo.
The companies said the competition authority confirmedalready-known conditions for the merger which include Optimusmaintaining a network-sharing deal with the Portuguese unit ofVodafone, with whom it must also negotiate the sale ofits fibre network.
Shares in Zon and Sonaecom led gains in the Lisbon market,with Zon up 3.2 percent at 4.45 euros and Sonaecom gaining 1.57percent to 1.808 euros. Lisbon's main PSI20 index wasdown 0.6 percent.
Vodafone (VOD)