MILAN, Italy (AP) _ Two major European media groups announced Friday they plan to develop a new European television network.

Italy's Mediaset SpA will team with KirchMedia, part of German media giant Kirch Group, to develop the new network.

The agreement caps more than five months of talks. Rupert Murdoch's News Corp. had been in talks on joining Mediaset and Kirch, but is not part of the deal.

Under the pact, Mediaset's parent company, will buy a 3.19 percent stake in KirchMedia for $164.3 million. Fininvest said it has an option to significantly increase its stake in coming years.

In addition, Saudi investor Prince Al-Waleed bin Talal Abdulaziz will buy 3.19 percent of KirchMedia. Al-Waleed already owns 2.3 percent of Mediaset, while Kirch owns 1.3 percent and France's Canal Plus 6.4 percent.

Fininvest, controlled by former Italian Premier Silvio Berlusconi, owns 48.4 percent of Mediaset.