Westport Innovations and Fuel Systems Solutions have entered into a merger agreement to create a new alternative fuel vehicle and engine company.

The merger combines 17 brands in the automotive and industrial space and will consolidate technologies and expand product portfolios, OEM relationships and global distribution networks. The new business entity will operate under the Westport Fuel Systems name and be headquartered in Vancouver, Canada.

Westport CEO David Demers and the rest of the Westport executive team will lead the combined company while Mariano Costamagna, the retiring CEO of Fuel Systems, will serve in a senior advisory position.

The transaction will result in a combined equity value of $351 million, based on the trading prices for both companies on Aug. 31, 2015. The transaction is subject to the approval of both Westport and Fuel Systems shareholders.

"The merger of these two organizations, both rich in technology innovation and with proven track records of manufacturing, production and sales, will provide greater breadth of alternative fuel systems solutions as products and development engineering to OEM partners globally," said Demers

The move is seen as complimentary. Both companies design alternative fuel products and while Westport has traditionally operated in the heavy-duty market, Fuel Systems has experience on the light- and medium-duty side.

“Our combined businesses and brands mean increased scale and relevance both internationally and in the U.S,” said Demers. “We are confident that we have found the right partner, and look forward to working together as we integrate the two companies."