(Telecompaper) French IT services groups Sopra and Steria have announced their intention to merge to create a European leader in digital services with EUR 3.1 billion of combined revenue, 35,000 professionals and operations in 24 countries. The operation will take the form of a friendly, voluntary public exchange offer initiated by Sopra for all of the shares of Steria on the basis of one Sopra share for four Steria shares. As of 4 April, the offer represented an exchange value of EUR 22 per Steria share, based on Sopra's average share price over a month. The new group would operate with a balanced corporate governance structure in the framework of a proposed tie-up between equals. Sopra's Pierre Pasquier would be chairman and Steria's François Enaud would be CEO. Sopra brings the power of its organisation in France, the strength of its banking, human resources and real estate products and its effective application management model. Steria brings its international reach (Europe and Asia) with a strong positioning in the UK, a pertinent offering in Business Process Services and its expertise in IT infrastructure management. The proposed tie-up should also generate annual operational cost synergies of EUR 62 million commencing in 2017. The transaction is expected to have a neutral effect on basic earnings per share in 2015 and be strongly earnings enhancing as of 2016. The ambition is to form a group that is capable of generating strong organic growth with the objective of achieving revenue of over EUR 4 billion and progressively improve the operating margin on business activity to approach the 10 percent mark.