The move, which if it is does lead to an offer and that is accepted by shareholders of GretagMacbeth parent firm Amazys Holding, will make the firm the one "credible supplier" in the market.

By joining together, the two firms said they would be able to double the potential market available to them to include new consumer and business markets as well as rapidly growing areas of their existing businesses such as printing, digital photography, cinema and HDTV.

"I'm shocked, it is a stunning move for the industry," said Geoffrey Clements, managing director of Colour Confidence, which is a supplier of both firms' colour management products.

"As long as it's not just for the shareholders it could lead to some fantastic products, as they are two world-class companies which I am sure can work together."

The firms compete with entry-level products such as the GretagMacbeth Eye-One and X-Rite Pulse (pictured) and with higher-end colour instruments and software GretagMacbeth with the Eye-One Pro iO and ProfileMaker and X-Rite with the DTP 70 and Monaco software. They also have competing ranges of pressroom spectrophotometers and densitometers.

Products from both firms will be supported for at least seven years after the deal.

The firms said in a joint statement that the move would create a global leader in the colour industry with significant synergies taking advantage of X-Rite's manufacturing and GretagMacbeth's technology, accelerate technology innovation, and extend the market opportunity.

GretagMacbeth has recently signed a deal with Pantone, and extended a deal with Heidelberg, its other customers include Apple Computer and DuPont. X-Rite's customers include Komori and Xerox.

X-Rite, which had a turnover of 71.3m ($126.2m) in 2004, will offer 128m, or 34p (CHF0.77) per share plus 2.11 X-Rite shares to complete the deal for Amazys, which had revenues of 60m in 2004.