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Quad/Graphics Inc., the largest privately held printer in the United States, plans to acquire Canadian rival World Color Press Inc. in a deal announced Tuesday.

The merger will create the second largest commercial printing operation in North America, trailing only industry leader R.R. Donnelly & Sons Co. Quad/Graphics intends to become a publicly traded company upon the closing of the transaction.

Quad/Graphics, based in Sussex, Wis., has about 800 employees at its Saratoga Springs plant, where it prints Newsweek and Sports Illustrated, among other magazines.

World Color, formerly known as Quebecor, operates a plant in Depew.

The boards of directors of Quad/Graphics and World Color Press have unanimously approved a definitive agreement where Quad/Graphics will acquire World Color.

The expanded Quad/Graphics will have nearly 30,000 employees serving customers in the U.S., Canada, Latin America and Europe. World Color and Quad/Graphics had aggregate unaudited revenues for the 12-month period ended September 30, 2009 of $5.1 billion and aggregate unaudited adjusted earnings before interest, taxes, depreciation and amortization of $647 million.

The transaction is expected to close by summer. Quad/Graphics’ management estimates that the combination will generate approximately $225 million in pre-tax net annualized savings within 24 months.

Quad/Graphics expects to register its Class A Common shares with the U.S. Securities and Exchange Commission and proceed with a listing on a leading U.S. exchange. Under terms of the agreement, shareholders of World Color (TSX: WC, WC.U) will receive at closing about 40 percent of the outstanding shares of Quad/Graphics and Quad/Graphics’ shareholders will hold approximately 60 percent of the shares.

The acquisition will enhance Quad/Graphics’ position as a commercial printing leader in North America serving the magazine, catalog, retail insert, book, directory, and direct mail product segments and enhance Quad/Graphics’ standing as one of the leading commercial printers in the world, company management said.

“Customer needs and demands are rapidly evolving, and our expanded company will be even better equipped to meet those demands,” said Joel Quadracci, Quad/Graphics chairman, president and CEO.

Quadracci will serve as chairman, president and CEO of the expanded company.

Mark Angelson, World Color chairman and CEO, said Quad/Graphics will make a “fine, stable home for Worldcolor managers and employees.”

The transaction will allow Quad/Graphics to expand its geographic scope by entering the Canadian marketplace and certain Latin American markets where the company currently does not have a presence, Quadracci said.

The future board will be comprised of the six current Quad/Graphics directors and two World Color directors: Angelson, who will chair the board committee on integration and consolidation, and a director to be named prior to closing, who will become a member of the audit committee.