Each of the companies' boards claim that a merged business, which would be renamed GfK-TNS, would benefit shareholders through a combination of "substantial operating efficiencies and enhanced revenue opportunities".
The combined group would have a single board, with TNS boss David Lowden sitting as chief executive. Hajo Riesenbeck and Donald Brydon, the chairman of GfK and TNS respectively, would become co-chairmen, with Brydon stepping down in Riesenbeck's favour at the 2010 AGM.
In a statement to the City, the businesses said that that the deal would enable the new group to "capitalise on the global opportunities in the market research market" and extend its reach into emerging markets in Asia, Latin America and Eastern Europe. GfK-TNS would be headquartered in London; while a German head office would be located in Nuremberg.
Should the deal go ahead, the shareholders of GfK and TNS would each hold half of the merged business. The largest shareholder would be GfK-Verein, with an approximate 28% stake; and it would appoint GfK chief executive Klaus Wubbenhorst as non-executive director.
Negotiations between the two businesses are ongoing and both parties said that the deal is not certain. Any deal would also need to be given regulatory approval.
Lowden, currently TNS's chief executive, said: "The market has long seen these two companies as ideal partners and now is the right time to bring them together. This is a partnership that would create a global leader across our market sectors, bringing new capabilities and value to our clients through the combination of strong syndicated and custom services. The merger would also create substantial value for both sets of shareholders."
Wubbenhorst said: "The combination of GfK and TNS would create a global leader in our industry. The two companies are a perfect fit and have a long and successful track record of working together. I have always believed that a combination would be in the best interests of customers, employees and shareholders."