Redbus Interhouse and TeleCity, two of the largest UK hosting companies, have agreed to merge.
Redbus, a colocation and managed service provider, has had a cash offer accepted for Telecity. Together, the companies will have a turnover of around £45m and be worth around £110m.
"There will be some job losses, but not many," said Mike Tobin, chief executive of Redbus, who will become chief executive of the combined company. Most of the senior staff will also come from Redbus.
Tobin said it was "excellent news for shareholders, employees and customers”, and will give the new company greater leverage with suppliers.
Redbus customers certainly deserve a boost from the company. Earlier this year, Redbus suffered performance problems and claims for compensation from users whose kit was destroyed by a power spike. Some problems took up to 27 hours to repair.