“Dutch Nuon and Swedish Vattenfall today announced they will join forces to form a leading European energy company,” the Swedish company said in a statement.

“Vattenfall has made an all cash offer of €8.5 billion enterprise value for 100 percent of the shares,” it said.

Vattenfall said it would initially acquire 49 percent of Nuon’s shares and would purchase the remaining 51 percent “in the coming six years under fixed terms.”

Nuon’s grid company Alliander was not included in the deal, which has already been unanimously recommended by Nuon’s board and should close by the second quarter of this year.

Vattenfall said the merger with the Dutch company would allow it to achieve “climate neutral” operations by 2050.

“Nuon’s widely respected knowledge in renewables and clean energy technologies is a very valuable addition to our own. It will accelerate the realization of Vattenfall’s strategy to make electricity clean,” Vattenfall chief executive Lars Josefsson said in the statement.

The Swedish company makes 80 percent of its sales in Sweden, Germany and Poland and currently produces 46 percent of its electricity from fossil fuels, 26 percent from nuclear power, 24 percent from hydroelectric power and one percent from wind.

In 2008, Vattenfall posted a net profit of 17.1 billion kronor ($2.0 billion), down from 19.8 billion a year earlier, on sales of 164.5 billion kronor.

Nuon, which counts more than 10,000 employees across the Netherlands, Belgium and Germany, meanwhile reported sales of €6.1 billion last year.

It is the second energy group in the country to be bought up by a foreign firm in just a few weeks.

In January, Germany’s second largest energy group RWE announced it would acquire its largest Dutch counterpart Essent for €9.3 billion.