The London Stock Exchange and German rival Deutsche Borse revealed plans to save more than £350 million a year as they agreed a tie-up to create an exchange giant worth more than £21 billion.
Billed as a “merger of equals”, the deal will see Deutsche Borse own 54.4% of the combined group and LSE shareholders the remaining 45.6%.
The pair pressed on with their all-share deal amid the threat of a possible rival bid from the owner of the New York Stock Exchange.
Intercontinental Exchange confirmed it was mulling a possible counter-offer earlier this month for the LSE, which owns index compiler FTSE and Borsa Italiana.
Chicago’s CME Group has also reportedly considered entering the fray.
The LSE and Deutsche Borse deal marks their third attempt to merge after previous moves failed in 2000, and 2004-5 when talks collapsed.
Under the plans, the business will maintain HQs in London and Frankfurt, while it will also be listed on the LSE and Frankfurt Stock Exchange.
The as-yet-unnamed group will be domiciled in the UK for tax purposes.
Details of the deal revealed aims to save j450 million (£353m) a year following the merger.
They said it was too early to gauge the impact on jobs, but said there will be “operational and administrative restructuring” and the potential for savings where there is duplication.
The groups said the deal will “bring together” the might of London as one of the world’s biggest financial centres and Frankfurt, the home of the European Central Bank with access to Europe’s largest economy.
Xavier Rolet, chief executive of London Stock Exchange Group, said: “We are creating an industry-defining combination.”
Carsten Kengeter, CEO of Deutsche Borse, added: “It is the logical evolution for our companies in a fundamentally changing industry.
“As a combined group we will create a European player that will compete on a global basis.”
The agreed all-share deal will see Mr Rolet step down, with Deutsche Borse boss Mr Kengeter becoming CEO with LSE’s Donald Brydon as chairman.