(Telecompaper) The European data centre operators Interxion and Telecity have agreed an all-share merger. The deal will take the form of a Telecity bid for Interxion, with the new company to remain listed in London. Interxion shareholders would receive 2.3386 new TelecityGroup shares for each Interxion share held, giving them 45 percent of the combined group. Interxion CEO David Ruberg, who led negotiations on the deal, will remain CEO for at least the first year, and Telecity's executive chairman John Huges will be chairman of the new company. In addition to an enhanced footprint of data centres, the companies expect an extra GBP 40 million in EBITDA per year from cost and revenues synergies as well as GBP 300 million in savings on capital expenditure. The deal remains subject to a definitive agreement, due diligence and approval by both companies' boards. Telecity has agreed to not consider other proposals until 04 March. Pending shareholder and regulatory approval, the merger is expected to close in the second half of this year.