Eldorado Gold Corp has agreed to buy European Goldfields for about C$2.5bn ($2.4bn).

The company’s shareholders will be offered 0.85 Eldorado share and C$0.0001 in cash for each European Goldfields share they own.

Upon completion of the deal, current Eldorado shareholders will own about 78% of the combined company while shareholders of European Goldfields will hold around 22% on a fully diluted basis, reports Reuters.

Eldorado said the deal would create a company with a market capitalisation of about C$11bn (US$10.59bn) and help diversify production.

The firm expects to increase annual production to reach more than 1.5 million ounces of gold by 2015 and said it plans to produce 650,000 ounces of gold by the end of this year.

European Goldfields owns 95% of the Stratoni lead, zinc and silver mine in north-eastern Greece, and also has gold and base metal deposits at Skouries and Olympias in Greece, and Certej in Romania.

Canada-based European Goldfields has gold reserves of ten million ounces within the European Union. It is also a partner of Greece-based construction company Aktor.

Eldorado is a gold producer and developer with operations in Brazil, China, Greece, and Turkey and its surrounding regions.