Baku, March 17, AZERTAC
The London Stock Exchange Group (LSE) and Deutsche Boerse have agreed terms for a "merger of equals", according to BBC .
The tie-up will create one of the largest exchange companies in the world with a combined value of about £21bn.
Under the terms of the deal, LSE shareholders will own 45.6% of the new holding company, while Deutsche Boerse shareholders will own 54.4%.
LSE chief executive Xavier Rolet said the two firms were "creating an industry-defining combination".
The two companies said together they should be able to make cost savings of €450m (£354m) a year, about 20% of the combined group's operating costs of €2.2bn last year.
The LSE group already owns Milan-based Borsa Italiana.
The two exchanges said the "combination of London, Frankfurt and Milan will provide a platform for financing and promoting economic growth of European companies and be an attractive offering to Asian and US companies looking to access investors and capital".
The newly-merged company will keep both the London and Frankfurt headquarters. The new holding company, UK TopCo, will be incorporated in the UK.
The merger is expected to be completed by the end of this year or early next year.
LSE chairman Donald Brydon will become chairman of UK TopCo and Deutsche Boerse chief executive, Carsten Kengeter, will become chief executive.