TechCrunch reported earlier this year that the two were in talks after Telefonica's own attempt at a social network site Keteke flopped.
Tuenti has been dubbed the "Spanish Facebook" and the two are thought to have been in talks for several months.
The tech blog reports that the two sides have "virtually sealed the deal" making way for an agreement whereby Telefonica will buy 90% of Tuenti's share capital.
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This article was first published on brandrepublic.com