Google has said it will buy rival Amazon for $2.2 billion in a deal that is expected to close on Tuesday.
The deal is expected “to strengthen our position in the cloud computing marketplace”, the search giant said in a statement.
The transaction, which is subject to regulatory approval, will create the world’s biggest online retailer, with an annual revenue of $25.8 billion.
Amazon will also be able to expand into other areas of business, including retailing and consumer goods.
Amazon is already the world leader in online retailing, with sales of $13.5 trillion in the first three months of this year.
The online retailer also has a presence in the health and beauty market, but the merger is expected provide more direct access to customers.
In the UK, the deal is likely to boost Amazon’s UK profits as well as its own.
“The combined company will be able expand its reach across the UK market, with a view to increasing its reach in the growing health and fitness space,” the statement said.
Amazon has been struggling with slowing sales of Kindle tablets.
Sales of its Kindle 3.6-inch tablet fell 11 per cent in the three months to March 31 from a year earlier, according to market research firm Gartner.
The firm’s UK sales fell 4 per cent last year.
“We expect this to be a positive result for the UK Kindle business and for Amazon in the long term, with the combined company bringing greater value for its customers,” Amazon said in the statement.
Amazon’s shares rose 2.9 per cent to $78.70 in late afternoon trading.
In Germany, Google bought rival OPPO for $5.4 billion, a deal which was approved by the European Commission earlier this week.
OPPPO, which had its UK office shuttered last year, said it had been left “very surprised” by the news and said it would seek to work with the regulator.
Google has a market value of $37.9 billion.
The German market is dominated by Google, Amazon and Amazon’s rival OPC, which has been fighting to get more space on its network.
The merger will mean Google is the largest shareholder in OPP, and will allow it to exert greater control over OPP.
Amazon, which also owns video streaming site Netflix, has been working to bring its own video streaming service to Europe.
The company also has plans to launch a new online bookstore, which will be similar to Google’s own brick and mortar stores.
Amazon also has other business in the U.S., with its US operations growing rapidly, while it also has an interest in retailing in Germany.
Google’s deal with OPP will add more than $3 billion to Amazon’s annual revenue, which the company says is more than double what it was generating in 2014.