SDL shareholders will receive 1.2246 new RWS shares in exchange for each SDL share they hold. The terms value SDL at 907 pence a share, a 52% premium to its closing price on Aug. 26.

SDL surged 35% to their highest in more than two decades by 1328 GMT, while RWS shares, which have gained 23% so far this year on the London Stock Exchange's Alternative Investment Market, slipped 11%.

The combined group, which will carry the RWS name, will have a presence in the United States, the UK and Canada, among other countries, and an expanded blue-chip customer base including 90 of the world's top 100 brands by value.

Amid the coronavirus crisis, RWS has benefited from increased activity among large technology clients in its Moravia business, which helps brands create products and content in over 250 languages, as well as Life Sciences' clients, that are working on vaccines and antibody testing.

The company said it expects the merger to result in annual cost savings of at least 15 million pounds and double-digit earnings per share accretion by the end of the first full financial year, upon deal closure.

Current RWS Chairman Andrew Brode and CEO Richard Thompson will retain their positions in the merged entity, the company said.

SDL is the latest addition to the RWS portfolio after the company bought neural machine translation solutions provider Iconic Translation Machines and localization and software solutions provider Webdunia.com earlier this year.

(Reporting by Jasmine I S in Bengaluru; Editing by Krishna Chandra Eluri)