The owner of the London Stock Exchange and German counterpart Deutsche Boerse have reached agreement on a £21bn “merger of equals”.
It will result in shareholders of the German firm owning just over 54% of the combined company. The deal is expected to complete by the end of this year or in the first quarter of 2017.
It later emerged that Deutsche faced a potential rival for the transaction, as New York Stock Exchange owner Intercontinental Exchange (Ice) said it was weighing up an offer for the LSE Group.
The tie-up creates one of the biggest exchange companies in the world, a large European operator capable of facing down tough competition from US and Asian rivals.
It will come under a newly formed holding company incorporated in the UK and listed on UK and German stock exchanges. The combined group will maintain headquarters in London and Frankfurt.
“Both cities are important trade centres for Europe and the global economy, and the boards are committed to maintaining their respective strengths and capabilities,” the companies said.