Wanado has bought a Spanish internet service provider (ISP) in a deal it says will make the merged group into the biggest ISP in Europe.

French firm Wanadoo said it is to buy Spanish firm eresMas for 255m euros ($257m; £163m) in shares.

Wanadoo said the deal will bring it an extra one million Spanish subscribers, giving it 7.8 million subscribers in Europe, second only to T-Online.

It will also put Wanadoo into a battle with Terra Lycos to be the market leader in Spain.

Wanadoo has pleged to pull into profit this year after making a core loss in 2001 of 64m euro.

Operating losses widened to 153m euros from a 129m euros a year earlier.