MADRID — Spanish production and services giant Mediapro and the Arbol Group, the biggest drama series producer in Spain, are merging to create a Spanish TV and film powerhouse.

The merger still has to be greenlit by Spain’s competition authorities, but that is expected to be a formality as the groups’ businesses complement each other without creating monopolies.

The combined entity will be significant Euro TV player with joint revenues for 2004 at $364 million, far above Brit “Wife Swap” originator RDF Media’s $89 million, though still dwarfed by Endemol at $1.25 billion.

The merged company will be owned 40% by Mediapro’s founders, 40% by Arbol’s founders, and 20% by WPP, Mediapro top exec Jaume Roures told Daily Variety, confirming the successful conclusion to merger negotiations.

The combo has still to decide on a new name. Into the medium-term, Mediapro and Arbol will continue to exist as a brand. Combo’s board of management will be staffed by shareholders, Roures added.

Mediapro’s founding partners are Roures, Gerard Romy and Tatxo Benet; Arbol’s Emilio Aragon, Daniel Ecija, Andres Valera and Jose Miguel Contreras.

Produced by its Spanish subsid Globomedia, Arbol’s drama series, such as family skein “Los Serrano” or sitcom “7 Lives,” offer urban middle-class entertainment.

Mediapro, 30% owned by WPP, has an increasingly ambitious line in auteur, social issue films. It announced last month that it will produce a Woody Allen film in Spain.

Mediapro and Arbol are core shareholders with Televisa in analog broadcaster La Sexta, which is to launch in spring.

The large question is how the two companies will use their increased muscle to, as the Mediapro Web site promises, “leverage their international scope.” Arbol owns Argentinian production house Promofilm, with offices in L.A., Miami, Mexico and Brazil. Promofilm produced adventure reality show “Conqueror of the End of the World” and “Temptation Island” for Telemundo. Mediapro’s Miami subsid Media World has produced news/entertainment service Centroamerica TV and soccer theme channel Gol TV.