Accountancy firms RSM Robson Rhodes and US-based RSM McGladrey plan to join forces.
The firms have signed an agreement in principle to bring together the two organ-isations, subject to final due diligence.
It is effectively a takeover by McGladrey, part of quoted group H&R Block.
The two firms said the deal was "an important step in a strategic plan to become the worldwide leader in the provision of accounting, tax and business consulting services to midsized companies".
The hope is they can challenge the Big Four of Deloitte, KPMG, PricewaterhouseCoopers and Ernst & Young in acting from larger private companies and small to medium sized public ones.
RSM McGladrey and RSM Robson Rhodes have cultivated a long-term working relationship, and both are members of the RSM International network, said to be the world's sixth largest professional services, accounting and consulting organisation, a loose affiliation.
RSM Robson Rhodes, which takes in a wide range of advisory services, including audit and business assurance, corporate finance, corporate recovery, PFI/PPP, forensic accounting, consultancy, and tax to both the private and public sectors, operates from nine offices in the UK and Ireland including Birmingham.
RSM McGladrey and its sister business McGladrey & Pullen claim to be the fifth largest US provider of accounting, tax and business consulting, with nearly 8,000 professionals and associates in more than 120 offices nationwide.
H&R Block has a market capitalisation of $6 billion.
Bob Hale, managing partner of the Birmingham office of RSM Robson Rhodes, said: "This transaction is a bold move designed to address the call for greater choice and to meet the growing needs of the international mid-market.
"The resulting organisation will also enhance career
opportunities for our people who will become part of a leading organisation that is taking the industry in a new direction."
He said the agreement had been driven by "industry demand for a new professional services model with the infrastructure, focus, capabilities, resources and expertise to serve the midsized market".
The Birmingham office has 12 partners and a total of 135 staff.
Based in Hill Street, it is strong on audit and tax and also takes in corporate finance, corporate recovery and forensic.
It has a turnover of around £10 million.
Mr Hale said mid cap companies were looking globally and required an alternative to the Big Four that had the necessary depth of resources and levels of capital.
H&R Block had that size and clout.
Confirming it was a takeover rather than a merger, Mr Hale noted: "It is a bringing together of two firms led by H&R Block."
It will result in one profit sharing entity.
Mr Hale said it represented the first stage of a wider European expansion.
"The aim is to expand throughout Europe and become a worldwide player," he added.
That means turning affiliations into a fully integrated firm. The deal meant an "exciting framework to operate in" and would mean expansion for Birmingham.
Steve Tait, president of RSM McGladrey, said: "We plan to bring together two premier organisations that share a passion and commitment to serving, and advocating for, midsized companies.
"This transaction will accelerate our emerging global presence, while helping to create a single worldwide brand that stands for success - both for clients and employ-ees."
RSM International is a worldwide member organisation of independent accounting and consulting firms. It is represented in each of the top 40 major business centres throughout the world, with more than 23,000 staff in over 70 countries.