VimpelCom and Hutchison could announce a deal to merge their respective Italian mobile businesses “as early as this week”, according to Reuters.

The deal, which has been on the cards for years, has reportedly gathered pace in recent weeks and both parties are finally close to agreeing a deal that would combine VimpelCom’s Wind, the country’s third largest operator, with Hutch’s fourth placed 3 Italia.

A 3 Italia-Wind combination in the country would hold approximately one third market share, putting the entity roughly on par with market leader Telecom Italia and second placed Vodafone.

The merger is likely to provide wider benefit to the Italian market, which has been plagued by a long running price war, thus hindering investment by the country’s operators as they continue to cut prices in efforts to win market share.

A Reuters source said Hutch’s managing director Canning Fok has met with VimpelCom executives in London several times this month, and “negotiations have become serious”.

Any deal would still require antitrust clearance to go through, but it is expected to get the green light after European regulators approved bouts of consolidation in Germany, Austria and Ireland, which also cut the number of operators in each market to three.

Hutch confirmed it held “exploratory negotiations” with Russia’s VimpelCom in May and a deal between the two was subject to reaching an “agreement on terms, signing a definitive agreement, achieving satisfactory debt levels and obtaining all necessary and corporate and regulatory approvals”.

VimpelCom issued a similar statement at the time, stating that the two firms were in negotiations over a joint venture, but warned of the potential obstacles to the deal.

In this latest development, sources claim Hutch’s chairman Li Ka-shing and VimpelCom’s head Mikhail Fridman are making new efforts to find a compromise and curb differences over capital structure and governance of the merged entity.

The two have come close to agreeing a deal in the past, before negotiations were scrapped over governance control.

A capital increase of the merged entity is also under consideration, a move which may be welcomed by Wind, considering its heavy debt load.

Hutch’s recent deal making in Europe has revolved around taking control of other operators, and it most recently attempting to secure a deal to acquire O2 in the UK from Telefonica.

It only has one other joint venture within its portfolio – a 50 per cent stake in Australia in partnership with Vodafone.