The board of Anglo-Swiss mining company Xstrata has said it is recommending shareholders accept merger terms with Swiss commodities trader Glencore.
The deal would create an industry behemoth with revenues of around $175 billion.
Xstrata said in a statement it was supporting the offer of 3.05 Glencore shares for each Xstrata share.
The deal values Xstrata at £31.9 billion on the shares' closing price Friday.
Glencore has a market capitalisation of £23.5 billion, according to data provider FactSet.
Xstrata is the world's biggest exporter of thermal coal and also produces copper, nickel and zinc.
If the deal is approved by 75% of Xstrata shareholders, the merged company would be one of the world's largest natural resources firms.
Glencore, one of the world's biggest traders in raw materials such as coal, cotton and corn, went public with a $10 billion IPO last year.
Its attempt to get hold of Xstrata has developed into a long-running saga.
Previous offers were resisted by Xstrata shareholders, including Qatari sovereign wealth fund Qatar Holding, which holds 12% of Xstrata.
Glencore improved its original offer of 2.8 shares last month, leaving issues of management structure and executive remuneration the main stumbling blocks to a merger.
The deal announced today would see Xstrata chief executive Mick Davis remain as CEO of the new company for six months, then leave the company to be succeeded by Glencore CEO Ivan Glasenberg.
Xstrata said it had agreed to give shareholders a separate vote on bonuses for senior executives, a key sticking point to a deal.
While Xstrata recommended that shareholders also vote in favor of the bonus scheme, the merger's approval will not depend on it.
Glencore chairman Simon Murray said the merged company "will have the scale to play a key role in meeting the growing global demand for commodities whilst helping resource holding countries create value from their natural endowments."
Xstrata, based in Zug, Switzerland, was formed in 2002 when it bought Glencore's coal assets. The company mines copper in the Americas, zinc in Spain and ferrochrome and vanadium in Australia and South Africa.
Glencore extracts, ships and refines raw materials from coal, to copper to corn. It is based in the Swiss town of Baar but has its main stock listing in London.
Glencore was founded in 1974 by Marc Rich, the fugitive trader who was controversially pardoned in 2001 by then United States President Bill Clinton just hours before he left office.
Mr Rich sold the company to its employees in 1994, and the firm has been at pains to distance itself from its founder and any whiff of improper activity, though environmental groups have since targeted the company for its mining interests.