VanceInfo Technologies (VIT) and hiSoft Technology (HSFT) announced that they have signed a definitive merger agreement, under which the companies will be combined in a tax-free, all-stock merger of equals with a combined equity value of approximately $875M. Under the terms of the agreement, VanceInfo and hiSoft shareholders will each own approximately 50% of the combined company. hiSoft will be the surviving listed company in the merger, and its shares will continue to be listed on the NASDAQ Global Select Market. A new name for the combined company will be announced in due course. Under the agreement, each outstanding ordinary share of VanceInfo will be exchanged for the right to receive one common share of hiSoft, and each American Depositary Share of VanceInfo, each of which represents one VanceInfo ordinary share, will be exchanged for the right to receive one ADS of hiSoft. Immediately prior to the merger, hiSoft will effect a 13.9482-to-1 share consolidation and change the ratio of hiSoft ADSs representing ordinary shares from one ADS for 19 shares to one ADS for one share, which effectively implies in a 1-to-1.3622 hiSoft ADS split. These changes are designed to ensure that hiSoft. The strategic combination will create a combined company with expected 2012 revenue of over $670M, which will be the largest China-based offshore IT services provider based on industry market research reports. The transaction is expected to close in Q4 of 2012.