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FRANKFURT—U.S. automated teller machine maker Diebold Inc. is close to formally announce a takeover offer for its German rival Wincor Nixdorf AG of more than €1.7 billion ($1.9 billion), people familiar with the matter said.

The official bid, which likely will come within the next couple of days, is to consist of 80% cash and 20% equity, these people said. Spokespeople for Diebold and Wincor had no immediate comment. The offer is expected to hinge on 75% of Wincor shares being tendered.

Such a binding move would come more than four weeks after Diebold and Wincor announced that they entered into a nonbinding agreement that would combine the industry's No. 2 and No. 3 companies by revenue.

Both said at the time they agreed on a cash-and-share offer that valued Wincor at €52.50 a share on Sept. 24, cautioning that there is no assurance that any binding agreement will be reached.

Because Diebold's share price has risen by about 19% since then, the share component that Wincor investors would receive improves accordingly. Wincor shares closed down 0.4% at €46.08 on Friday.

Investors have said privately the gap between Wincor's share price and Diebold's prospective offer price is because of uncertainty surrounding the deal and a potential withholding tax that affects mixed cash-share offers in Germany.

The Wall Street Journal in October reported that a largely overlooked tax law may substantially hit mixed cash/share offers. People familiar with the Diebold-Wincor transaction said they expect the tax to be a minor threat to this deal, however.

Diebold and Wincor said in October that a combination enables them to sharpen their focus on the growing digital-payments segment and move away from ATMs, for which prices are declining. By joining forces, they could boost investment into the development of software and IT services, which is costly.

A deal would also boost Diebold's European presence, having previously concentrated on North America.

"There is a great geographical fit and the price for Wincor is quite attractive," said analysts from DZ Bank last month.

Diebold, led by former Hewlett-Packard Co. executive Andy W. Mattes, is in the midst of a cost-cutting drive, with revenue having stagnated over the past eight years. It is aiming to cut annual costs by $200 million, while investing $100 million into electronic security, software and IT services through 2017.

Credit Suisse and J.P. Morgan are advising Diebold, while Goldman Sachs is advising Wincor.

Write to Eyk Henning at eyk.henning@wsj.com

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(END) Dow Jones Newswires

November 20, 2015 14:05 ET (19:05 GMT)

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