* Angola's Isabel dos Santos holds largest Zon stake
* Synergies seen at 300-500 million euros
* Would create No.2 telecom operator in Portugal (Adds quotes, details)
LISBON, Dec 14 Portugal's Sonaecom and the largest shareholder in pay TV and telecoms firm Zon Multimedia on Friday proposed to merge Zon and Sonaecom's mobile phone unit Optimus, starting a consolidation move long awaited by the market.
The operation, which is yet to be approved by other Zon shareholders, would create the country's second-largest telecoms firm to compete with top-placed former monopoly Portugal Telecom in all segments from fixed phones to mobile services, broadband Internet and pay TV.
Market experts have long argued that four telecom operators in a mature market and recession-hit economy like Portugal are at least one too many and predicted the Zon-Sonaecom merger especially after Angolan investor Isabel dos Santos increased her stake in Zon to almost 30 percent in June.
Zon is now the largest pay-TV firm in Portugal and fourth-largest telecoms operator in terms of revenues. Optimus is the country's No. 3 telecom firm after the local unit of Vodafone Group PLC.
Sonaecom said in a statement that it and dos Santos' Kento and Jadeium entities that hold the Zon stake had "reached a deal to promote jointly with the boards of Zon Multimedia and of Optimus a merger operation by incorporating Optimus into Zon."
Isabel, the daughter of long-serving Angolan President Jose Eduardo dos Santos, has various investments in Portugal. Zon, which has 1.6 million clients in Portugal, also has a subsidiary in Angola.
The sides also proposed a swap ratio for the holdings in the merger based on a Zon valuation worth 150 percent of Optimus value, but said other proposals could be considered.
"Kento/Jadeium and Sonaecom believe that the merger between Zon and Optimus will provide a significant optimisation of resources and improved efficiency and profitability that will lead to the strengthening of the investment capacity of the merged entity," the statement said.
Analysts say the merger can lead to cost cuts and other synergy savings worth up to 500 million euros. (Reporting by Andrei Khalip; Editing by James Dalgleish)