Two of Europe's leading online auction service providers London-based PLC and Hamburg-based AG have hammered out an agreement to merge in a stock-swap deal valued at more than £700 million.

Upon completion of the transaction, the combined company will be called QXL Ricardo PLC, the companies said.

By combining QXL's network of auction sites in nine European languages and currencies with Ricardo's sites in Germany, the Netherlands, Switzerland and the U.K., the merger will create a pan-European auction giant with around 1.2 million registered users.

The QXL-Ricardo pact was announced ahead of today's announcement that Madrid-based ISP (Internet services provider) Terra Networks SA will acquire US Web portal Lycos in a £8
billion stock swap