Silicon producers Grupo FerroAtlántica and Globe Specialty Metals (GSM) are to merge.
The new company aims to benefit from fast-growing demand from the solar, automotive, consumer products, construction and energy sectors, and will have a combined value of $3.1 billion (£2 billion).
It will have an expanded geographic reach, building on GSM's presence in North America and FerroAtlántica's footprint in Europe, including access to FerroAtlántica's cost-efficient sources of hydroelectric power.
The deal is expected to create cost synergies of approximately $65 million (£42 million) annually, $30 million (£19 million) of synergies from the refinancing of existing debt and other financial savings, and a release in cash flow of approximately $100 million (£65 million) over three years through more efficient working capital management and the adoption of other efficiencies.
FerroAtlántica is wholly owned by Grupo Villar Mir, one of Spain's largest private companies. Grupo Villar Mir will hold a 57 percent ownership stake in the new company, and current Globe shareholders will hold a 43 per cent stake.