After months of negotiations, Brazilian telecommunication titan Oi Participacoes TNE has reached an agreement to acquire rival Brasil Telecom BRP, two newspapers reported Friday.

The reported $4.6 billion deal would consolidate a rapidly growing industry in the emerging South American economy, giving Oi – also called Tele Norte Leste Participacoes SA and already Brazil’s biggest phone carrier – a 70% share of Brazil’s fixed-line market.

The newspapers reporting the deal – Folha de S. Paulo and Valor Economico – said the companies will announce more details next week.

The companies have been in talks since early this year. Brasil Telecom top shareholders, including Previ, Citigroup Inc. C and local pension funds, have said they are willing to sell.

Until the deal is official, investors can’t be too certain, as Brazilian law forbids one group from holding two separate telecommunications concessions. Although, the government is seeking ways around the law to permit the takeover, Reuters reports.

The World’s Biggest Emerging Market

Last year, Brazil’s main stock market index, Bovespa Holding SA, rose 71% – even faster than India’s.

And on Feb. 20, Brazil displaced China to become the world’s biggest emerging market, according to a key index – Morgan Stanley Capital International Global Emerging Markets (MSCI GEM).

That shift will likely attract billions in new money to Brazilian stocks, especially from money managers who benchmark their portfolios against the MSCI GEM index.

The bottom line: Expect money to flood Brazilian shares, says Keith Fitz-Gerald, Investment Director for Money Morning.

“Anytime a country moves to the top of that index there’s a strong re-indexing effect,” Fitz-Gerald said. “And that will lead to billions of dollars of institutional money being shifted as those professional investors rebalance their portfolios. They’re going to move substantial amounts of money into Brazilian stocks.”