The venture represents an expansion of the existing Hamburg-based Transpetrol company, which is jointly owned by the two companies, into new business areas.

The partners say the new joint venture would expand their present rail logistics activities, enabling the growth of VTG's Rail Logistics unit and allowing Kuehne & Nagel to offer customers an extended range of services in the industrial, agricultural and petrochemical sectors.

The joint company will cover all of Europe well as Russia and Turkey.

Final contracts will be agreed later this year, subject to the approval of the relevant corporate bodies and competition authorities. It is anticipated by both companies that VTG will have a majority shareholding in the new venture; currently VTG owns 74.9% of Transpetrol while Kuehne & Nagel holds the remaining 25.1%.