Russian aluminium firm Rusal is buying its local rival Sual, reports say.
The combined group would be the world's largest aluminium firm
It will also see it take over the alumina business of Swiss group Glencore, according to the Financial Times and the Reuters news agency.
It will become the world's biggest aluminium producer and a new Russian monopoly, similar to gas giant Gazprom.
Chelsea owner Roman Abramovich sold his stake in Rusal in 2003 for £1.8bn ($3.4bn) - helping bankroll the London football club's revival.
The combined firm will be listed on the London Stock Exchange and chaired by Sual head Brian Gilbertson, the FT said.
It added that an agreement was signed last week and was believed to have been cleared by Russian president Vladimir Putin.
Under the terms of the deal, Rusal will own 64.5% of the new company, Sual 21.5% and Glencore 14%.
Reuters quoted an unnamed source as saying that the new firm would produce four million tonnes of aluminium per year.
Neither Rusal, Sual nor Glencore have commented on the reports.
The global aluminium industry is currently led by US giant Alcoa.
Rusal produced 2.7 million tonnes of the metal last year, compared with Sual's 1.05 million.
The two firms are working together on increasing aluminium production in north-west Russia.