(Alliance News) - Northgate PLC and Redde PLC on Wednesday said the UK Financial Conduct Authority approved of an all-share merger of the vehicle rental and services firms.
The tie-up, due to be completed in the first quarter of the year, still needs approval from the UK's Solicitors Regulation Authority, however.
A high court hearing approving the merger will be held following SRA backing, the companies added.
Redde shares will then be delisted the following business day.
Under the terms of the merger, each Redde shareholder will receive 0.3669 of a new Northgate share for every Redde share held. After completion, Northgate shareholders will control 54% of the combined company and Redde investors the remainder.
Northgate and Redde explained the merged firm - to be called Redde Northgate PLC - had a "compelling strategic logic" which will deliver cost savings as well as establish a complimentary and comprehensive suite of mobility services.
Northgate shares were 1.6% higher at 277.32 pence each in London on Wednesday morning, Redde's stock was 1.8% higher at 101.80p.
By Eric Cunha; ericcunha@alliancenews.com
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Redde Northgate (REDD)