France's Lafarge and Holcim of Switzerland have cemented plans for a merger which could create a $55 billion firm.
Holcim plans to acquire Lafarge to create a business with combined sales of over $40 billion in what would be the industry's biggest-ever tie-up.
The merger is expected to be formally announced today after proposals were agreed on Saturday.
The deal is likely to face scrutiny from global competition watchdogs, as a Lafarge-Holcim combination would have a dominant position in both Europe and the United States.
Both firms are likely to be counting on support from major shareholders. More than a third of Lafarge stock is own by two investors who are represented on its board.
The two companies had already issued statements on Friday announcing they were in advanced talks to merge, a deal which would help them slash costs, trim debt and better cope with the soaring energy prices and weaker demand that have hurt the sector since the 2008 economic crisis.
Their share-price levels jumped to four-year highs on the news, lifting the entire cement sector. A merger would take out spare capacity and help consolidate the market, analysts said.
Lafarge chief executive Bruno Lafont will become chief executive of the combined entity while the chairman will be Swiss.
Investment-bank Rothschild and boutique firm Zaoui & Co - helmed by veteran deal-making brothers Michael and Yoel Zaoui - are advising Lafarge, while Goldman Sachs is advising Holcim, according to two sources close to the deal.
Additional reporting by Reuters
