(Reuters) - Telstra Corp (NASDAQ: TLS) and News Corp (NASDAQ: NWSA) on Tuesday confirmed they would combine Foxtel and Fox Sports Australia, two months after Australia's competition watchdog dropped its opposition to the merger.

Fox Sports is owned by News Corp, which also owns Foxtel jointly with Australia's Telstra.

Telstra expects to record a one-off accounting gain, estimated at A$263 million ($204 million), as a result of the deal, it said in a separate statement.

However, the company's previously stated guidance for financial year 2018 remains unchanged.

Under the terms of the deal, News Corp will hold 65 percent in the combined venture and Telstra 35 percent. News Corp will appoint four directors, including the chairman, and Telstra will appoint two directors.

The transaction is expected to close during the fourth quarter of this year.

(Reporting by Chris Thomas in Bengaluru; Editing by Matthew Mpoke Bigg and Rosalba O'Brien)

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