Waterford has seen its sales fall

The Irish china and glassmaker is to take over Royal Doulton, valuing the Stoke-based firm at �39.9m ($76.9m).

Waterford Wedgwood is to offer 12 pence in cash for each share in Royal Doulton , whose china was used on the Titanic.

Both firms have battled competition from cheaper imports, as consumer demand for cheaper crockery has grown.

Transformation

Waterford Wedgwood chairman Sir Anthony O'Reilly said the deal would "transform" its business, which has seen sales fall.

The enlarged group will have outstanding people and enhanced competitiveness on the ceramic marketplace Hamish Grossart, Doulton

In December, Royal Doulton said it had halted falling sales following a restructuring which has seen UK factories closed and production shifted to the Far East.

The takeover will ensure some of Doulton's famous china continues to be made in the UK. The firm is currently in the process of shutting down a factory in Nile Street, Stoke with the loss of 500 jobs.

Doulton chairman Hamish Grossart welcomed the Waterford Wedgwood approach, describing it as an "attractive offer".

"The enlarged group will have outstanding people and enhanced competitiveness on the ceramic marketplace," he said.

Revenue boost

Waterford Wedgwood, which already owns 21% of Royal Doulton, has been keen to buy the company to help boost its own business, which has suffered from sliding sales.

Last month, Waterford Wedgwood said like-for-like sales for the six months to 30 September were down 5% and trading remained "very challenging".

Waterford Wedgwood's Sir Anthony said the benefits of buying Royal Doulton were "immediately apparent".

"We can add Royal Doulton's revenues to our own revenues without greatly increasing out costs," he said.

Waterford Wedgwood was formed in 1986 when crystal maker Waterford bought the 250-year-old Wedgwood china business, while Royal Doulton's origins date back to 1815.