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. Last Updated: 07/27/2016

Viag Buys Algroup in Stock Swap

ROME -- The reshuffling of corporate Europe lurched a step forward as Viag AG, Germany's third-largest utility, announced it was acquiring Algroup AG of Switzerland in a stock swap worth $8.7 billion.

At news conferences in Munich, Germany, and Zurich, Switzerland, company executives said Friday that they would form a group with $31 billion in annual sales that would have major interests in energy, telecommunications, aluminum, chemicals and packaging.

The companies said the merger would enable them to achieve savings of about $334 million a year, in part by shedding about 2,500 jobs, or 2 percent of the combined work force of 127,000.

Viag shareholders, who will control 65 percent of the new company, will receive 10 new shares for every Viag share, while Algroup shareholders will get 21.7 shares for every Algroup share.

The merger announcement came only days after Daimler-Benz of Germany concluded its takeover of Chrysler to form DaimlerChrysler, the world's fourth-biggest automobile group. Also this month, Clariant AG and Ciba Specialty Chemicals, both of Switzerland, agreed to an $8 billion merger to create the world's No. 1 specialty chemicals firm.