Swansea Metropolitan University has agreed to merge with University of Wales Trinity Saint David There should be no more than six universities in Wales by 2013, an assembly government sponsored body says.
The Higher Education Funding Council for Wales (HEFCW) said the current 11 institutions should be reduced to make the sector sustainable.
Discussions on how to achieve it will take place in the new year, it said.
Education Minister Leighton Andrews recently warned universities in Wales they must “adapt or die”.
HEFCW’s Prof Philip Gummett said the reduction in numbers help Welsh universities compete in the 21st Century.
The body is responsible for administering funds from the Welsh Assembly Government for higher education institutions.
It said its report followed requests from the higher education sector for it to take the lead in reconfiguring Wales’ university structure.
The report called for the changes to take place by March 2013.
“We believe that the approach that we have outlined will make the sector the strongest and most sustainable it can be in order to compete in the 21st Century”
Prof Philip Gummett HEFCW chief executive
Their distribution should reflect regional needs with no more than two institutions per region, HEFCW recommended.
However, the report recognised the need for these institutions to retain a number of satellite bases.
Each region should focus on research, widened access and strong community links, with HEFCW’s funding being increasingly directed towards sustainable excellence and relevance to Welsh Assembly Government objectives.
No more than two universities should have an income below the UK median and neither of these should be located in south east Wales, the report suggested.
Prof Gummett, chief executive of HEFCW, said: “We have not until now been so explicit in our expectations for the structure of higher education in Wales, preferring the sector to come forward with proposals. But we have been asked to give a clearer lead.
“We believe that the approach that we have outlined will make the sector the strongest and most sustainable it can be in order to compete in the 21st Century for students, for research funding, for business contracts, and so on, and to provide the best possible service to Wales and the wider world.
There have been a number of university mergers in Wales in the past six years.
Cardiff University and University of Wales College of Medicine merged in 2004, the Royal Welsh College of Music and Drama joined the University of Glamorgan Group in 2007 and the University of Wales, Lampeter, and Trinity University College, Carmarthen, joined forces this year.
Earlier this month an agreement in principle to create a single new university for South West Wales (University of Wales Trinity Saint David and Swansea Metropolitan University) was announced.
Education Minister Leighton Andrews told the Institute of Welsh Affairs’ conference in December that their future funding, including being allowed to charge higher tuition fees, would depend on a willingness to “progress swiftly to merger and reconfiguration”.
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