A letter of intent for the deal has already been agreed by both parties, with a contract due to be signed in the spring of this year.

Manroland said that the deal would extend its leadership position in the newspaper printing sector and put it ahead of Goss and KBA in the web offset market.

It added that that any deal would guarantee the continued existence of the Wifag brand and customer relations, and that Wifag would still be based out of Bern, Switzerland, but it makes no mention of any changes to manufacturing.

"Existing order backlog obligations will be met," PrintWeek was told. "Other new business will be approached jointly after the merger of Manroland and Wifag. Wifag will no longer handle new business contracts independently."

Chief executive Gerd Finkbeiner said: "Our industry is marked by an ongoing and necessary consolidation. The current situation allows us to actively grasp the opportunities in the market to strengthen our business."

The company said that announced redundancy plans would continue at both Manroland and Wifag as the parties negotiated the new corporate structure.

Wifag produces newspaper, packaging, converting and digital presses. Last year, it employed 1,500 people worldwide with a turnover of CHF500m (£310m).

The company announced it was looking for a partner last October as it introduced a raft of cost-saving measures, that included 300 redundancies.

Manroland reported a turnover of €1.7bn (£1.5bn) for 2008 when it announced 625 job cuts from its 8,656-strong workforce and the closure of its Mainhausen factory in Germany.

More recently, it was the subject of ongoing rumours of a merger with rival Heidelberg and has also undergone a debt-for-equity swap that freed it of debt.

The company responded as to whether the Wifag deal would mean a deal with Heidelberg had no future with: "There is no way around consolidation. This transaction is the first evidence of this development."