Wabtec Corp. plans to acquire Faiveley Transport S.A., a global provider of value-added, integrated systems and services for the railway industry with annual sales of about $1.2 billion.

The transaction, which is subject to various conditions, including labor group consultations and other regulatory requirements, has been structured in three steps.

The total purchase price is about $1.8 billion, including assumed debt. Wabtec plans to fund the cash portion of the transaction with cash on hand, existing credit facilities and potentially other debt financing.

The strategic combination of Wabtec and Faiveley Transport will create one of the world’s largest public rail equipment companies, with revenues of about $4.5 billion and a presence in all key freight rail and passenger transit geographies worldwide. Wabtec expects to realize at least $44 million in annual pre-tax synergies from the combination, and the transaction is expected to be accretive to Wabtec’s earnings per diluted share in 2016.

Faiveley Transport’s headquarters in Gennevilliers, France will become Wabtec’s global transit headquarters, under the Faiveley Transport brand name. Wabtec also intends to maintain the existing

Faiveley Transport human resources policy in Europe for a period of at least 18 months after closing and to complement the company’s existing Centers of Competencies for engineering and research and development, in line with Faiveley Transport’s 2018 Strategic Plan presented in May 2015.