The companies say that this move would establish a global reinforcements and composite fabrics products company with revenues of around US$1.8 billion (€1.5 billion) and 10 000 employees.

The transaction is expected to be structured as a joint venture, with Owens Corning owning a 60% equity interest and Saint-Gobain owning the remaining 40%. After a minimum of four years, Saint-Gobain would have the option to sell its 40% stake to Owens Corning.

The merged businesses will become a new company, to be called Owens Corning-Vetrotex Reinforcements. This would have operations across Europe, North and South America, and Asia, with a presence in the emerging markets of China, India, Russia, Mexico and Brazil.

Saint-Gobain's Textile Solutions business, which focuses on the construction market, will remain part of Saint-Gobain's High Performance Materials Sector, and Owens Corning's Veil Technologies and Fabwel businesses will remain part of the Owens Corning Composite Solutions Business.

Owens Corning-Vetrotex Reinforcements would be head-quartered in Toledo, Ohio. The board of directors would be made up of three representatives from Owens Corning and two from Saint Gobain. The company's chief executive officer would be Chuck Dana, the current president of Owens Corning's Composite Solutions Business.

The transaction is expected to close by early 2007.