Under the name of Continental Confectionery Company, the new venture will aim to accelerate and compound growth in B2B chewing gum.
"By combining the operations, we will create an increased scale of operations and will be able to offer a high quality, full line confectionery and chewing gum product portfolio to the market," said Murat Ülker, chairman of Yıldız Holding and Holger Bagger-Sørensen, chairman of Gumlink in a joint statement.
The deal, subject to approval from the Turkish authorities, will aim to inject growth into a stagnant chewing gum market, and also marks construction of a new gum and confectionery plant in Turkey.
"The creation of a new and state-of-the-art confectionery and chewing gum manufacturing facility in Turkey, together with strong technology and innovation capabilities, will further strengthen the value proposition offered to current and new customers,” affirmed the two companies.
Under terms of the agreement, both firms will transfer certain parts of their respective operations to CCC.
Yıldız, that acquired upmarket Belgian chocolatier Godiva last year in a $850 million (€658m) deal through its confectionery producer Ülker, will transfer its non-chocolate confectionery and chewing gum division.
Denmark's Gumlink meanwhile will transfer its commercial and production-related activities in private label and private brand chewing gum operations in Europe, Russia, CIS, Middle East, and North Africa to CCC.
Both parties claimed the shift of manufacturing operations, scheduled to take place in the next two years, will occur in "a controlled manner".
"We believe that there is a strong strategic, operational, and cultural fit between our two companies, which will enable us to create interesting synergies for the benefit of both parties and our valued customers," added the chairmen.
Reports in the Turkish press suggest that that CCC will initially receive an injection of US$100 million (€77m) and that Ülker controls a 12 per cent share of the chewing gum market.