Japan's Mitsubishi UFJ Lease says it will buy smaller rival Hitachi Capital Corp in a deal calculated at 294 billion yen ($2.8 billion).
The two companies formed a capital alliance in 2016 and had been negotiating a merger since, they said in a joint statement.
The deal would help the new company, to be set up in April, to compete with global competitors, they said.
Mitsubishi UFJ Lease would give 571 million shares to shareholders of Hitachi Capital, making the deal worth about 294 billion yen.
Hitachi Capital has a market value of 319 billion yen based on Thursday's close.
The two companies will have assets worth about 10 trillion yen and almost 10,000 employees, they said.
Their combined revenue will be around 1.4 trillion yen ($13.3 billion), a Reuters calculation showed.© Thomson Reuters 2020.