In the tender offer, Vacon shareholders are being offered 34 euros for each share, a premium of 13 percent to the stock's closing price on Thursday.

Vacon makes variable-speed AC drives, which are used to control the speed of electrical motors. It has around 1,600 employees in 90 countries, and last year its sales amounted to about 400 million euros.

Vacon said its board of directors recommend the owners to accept the offer, and shareholders with in total about 25 percent of the shares are backing the offer with certain customary conditions, it said.

"By joining forces the two companies will create a Nordic based, global player - a new AC drives business with the clear ambition to build a leading position in the AC drives market," Vacon board chairman Panu Routila said in a statement.

Danfoss, with 23,000 employees, makes products used in air conditioning and heating buildings and it is owned by its founder's family.

The possible deal has to be approved by competition authorities.

Vacon also on Friday cut its profit and sales outlook for the full year, citing risks in its order intake.

(Reporting By Teis Jensen; Editing by Jussi Rosendahl)