The companies, both of which operate call centres and related services, said in a joint statement they would maintain headquarters in Luxembourg and Majorel's listing on Euronext Amsterdam after the deal.

If it is finalised, the new company would be 44.9% owned by Sitel's majority shareholder the Mulliez family, with two 17.3% stakes held by Majorel shareholders Bertelsmann Luxembourg S.a.r.l and Saham respectively, 11.6% by Sitel and Majorel management, and 8.8% subject to a free float, they said.

The companies plan to increase that free float to at least 20% by selling shares within a year of the deal closing, they said.

The terms are conditional on a shareholders' vote and the signing of final agreements, the companies said. Subject to that, the proposed merger is expected to close in the fourth quarter of this year or the first quarter of 2023.

Shares in Majorel initially rose more than 15% on the news and were up 13.7% at 29.00 euros by 0906 GMT.

"The proposed combination would create a strong force with combined pro-forma revenues of 5.4 billion euros," the companies said in the statement.

($1 = 0.9502 euros)

(Reporting by Toby Sterling; Editing by Jan Harvey)