Carphone Warehouse, which owns TalkTalk and also AOL UK's broadband business, will take on Tiscali's three million customers and will have 25 percent of the market when the deal goes through next month.
The company said the move "ends any uncertainty for Tiscali customers" who may have been concerned by reports last month that the troubled ISP was close to administration. Auditor Ernst & Young said in April that mounting debts had left Tiscali close to collapse.
Tiscali customers can now be "safe in the knowledge they'll get uninterrupted service", according to a Carphone Warehouse statement.
"Six years ago, no one could have imagined that we would build the largest residential broadband provider in the UK, but our determination to offer incredible value with the latest technology has propelled us to being the most popular provider in the country," said Carphone Warehouse chief executive Charles Dunstone. "Combining Tiscali with TalkTalk creates a unique platform that will allow us to innovate faster and provide an even better service for our enlarged customer base."
Carphone Warehouse has created a website for Tiscali customers looking for more information on how the acquisition affects them.