Global natural gas vehicle (NGV) supplier Landi Renzo SpA and California-based Clean Energy Fuels Corp. said Monday they plan to combine their compressor manufacturing units to form a standalone company.

Italian-based Landi Renzo is familiar with the North American market. Three years ago it created SAFE North America to market compressed natural gas (CNG) compressors on this side of the Atlantic. Landi has more than 60 years of experience with CNG.

The two companies said the combination is complementary, as SAFE has a strong presence in European and Asian markets, and Clean Energy Compression is well established in the North and South American markets.

When the deal closes, which is expected by the end of the year, Landi Renzo would be majority owner (51%) of the combined entity and assume operational management, with Group CEO Cristiano Musi as CEO of the combined entity. Clean Energy would retain the minority stake, with its CEO Andrew Littlefair serving as chairman.

The move by Clean Energy was foreshadowed earlier this month during a 3Q2017 earnings conference call in which management unveiled plans to reduce its fueling network of 600 stations and seek a partner for its compression equipment.

The new company is to be headquartered in Italy, but it would retain Clean Energy’s British Columbia manufacturing operations.

“The world is rapidly waking up to the harmful impact that diesel is having on air quality,” said Musi. The combined compressor company should be “uniquely positioned” to take advantage of trends toward NGV transportation with a “global footprint.”

Littlefair echoed Musi’s comments, noting that the businesses create “a completely complementary structure in geography, expertise and highly competitive products.” The organization would “automatically achieve leading positions in Europe and North America, and lay the foundation to accelerate growth in new geographies of the Middle East, Africa and Asia.”