Two IT companies specializing in the telecommunications industry, AsiaInfo Holdings, Inc. and Linkage Technologies International Holdings Ltd. announced Monday that they will merge to form a combined company named AsiaInfo-Linkage Inc.

Under the terms of the deal, Linkage shareholders will receive $60 million in cash and about 26.8 million AsiaInfo shares at the close of the trading on December 4. AsiaInfo's shares closed at $25.10 on the Nasdaq on December 4.

The combined AsiaInfo-Linkage Inc will have a market value of over $1.8 billion and create an annual income of $360 million, becoming the second-largest telecom charging system (business support system and operations support system) supplier in the world by market value and income.

After the completed deal, AsiaInfo shareholders will hold about 64.2 percent of the shares in the combined company, while Linkage holds a 35.8 percent stake.

According to the agreement, AsiaInfo-Linkage's board of directors will include nine members, with six from AsiaInfo's board and three from Linkage's board.

Insiders from AsiaInfo also disclosed that Sun Libin, Linkage's chairman and chief executive officer, will serve as AsiaInfo-Linkage's board's executive co-chairman and James Ding, AsiaInfo's chairman, will become AsiaInfo-Linkage's board co-chair.

Steve Zhang, AsiaInfo's CEO, will keep his post in the merged company.

"We are creating the preeminent software solutions provider in China's telecommunications industry," said Zhang.

"The combined company's expanded service offering, extensive base of highly skilled engineers, world class R&D capabilities and complementary customer bases will enable us to better service and anticipate our customers' needs," he was quoted as saying.

"Going forward, we will leverage our products and services which range from system implementation and maintenance services to high-value consulting in order to capitalize on China's fast-growing telecom software industry. In addition to growing our business domestically, the merged company will explore new revenue drivers by looking abroad," he added.

"This is a very exciting development and milestone for our company and an important move that will benefit China's telecom software industry," said Sun.