Diebold is in talks to acquire its Germany-based competitor Wincor Nixdorf for nearly $2 billion, according to announcements from both companies.

The proposal includes a tender offer of EUR 52.50 per Wincor Nixdorf share, paid in cash and Diebold shares. According to Wincor Nixdorf, the companies signed a non-binding term sheet on Sept. 24.

The deal is still in its early stages, however.

“There can be no assurance that any binding agreement will be reached at the above mentioned terms, or at all, or that a public tender offer will be launched,” Diebold said. “Any agreement considered by Diebold and Wincor Nixdorf would be undertaken with the objective of creating value for both sets of shareholders, customers and employees alike.”

The deal would combine two of the world's largest ATM companies, and it comes at a time when both have been working on turnarounds.

Diebold, based in North Canton, Ohio, has been pursuing a $200 million cost-cutting plan since 2013 and said in an investor presentation it is en route to becoming a services-based company enabled by software. In 2014, it reported $3 billion in revenue and $114.4 million of net income. The company currently employs 16,000 people.

Wincor Nixdorf, which also reported about $3 billion in revenue in 2014, announced in April that it would scale back on its hardware business and focus on software and cashless payments, among other things. That plan involves shedding 1,100 employees, or 12% of its workforce, over the next three years, it said.

Brian Bailey, vice president of software and strategy for competitor NCR Financial Services, said only time will tell whether the deal will pay off.

“I think they're doing this because they're both struggling to remain relevant in today's financial services industry,” he said. “We think that this combination really doesn't add a ton of value to financial institutions or credit unions. It's really just a bigger ATM company, and with it will come the necessary overlap of product lines that will be rationalized. We think it will just create confusion for customers.”

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