Racing and Stade Francais are two of the biggest rivals in the French championship and the announcement came as a lightning bolt for European rugby.
“This association, effective from next season, will give birth to a new club that preserves the roots of Racing 92 and Stade Francais Paris, while expanding the means for youth and French rugby,” said a statement announcing the plan.
— Stade Français Paris (@SFParisRugby) March 13, 2017
Each has built, or is building a new stadium. Each has spent massively on star talent with Dan Carter at reigning Top 14 champions Racing 92 and Italian captain Sergio Parisse and rising French fly half Jules Plisson at Stade.
Both teams have been struggling this year however, with Racing 92 in seventh place — Carter was jeered off the field at the weekend — and Stade Francais in 12th.
No immediate details were given of how the grounds and teams would be used. Club presidents, Jacky Lorenzetti of Racing and Thomas Savare of Stade Francais, champions in 2015, were to speak later Monday at a press conference.
But the deal will have massive implications for the Top 14 and European club rugby.
Racing were slumbering in France's second division when real estate billionaire Lorenzetti took them over in 2006. Savare, who made his name in finance and credit cards, took over Stade Francais in 2011 when they were threatened with bankruptcy and relegation.
The clubs have spent hundreds of millions of euros on redeveloping and new players since 2010.
Stade Francais's Jean Bouin stadium was redeveloped in 2013 and reopened with capacity increased from 13,000 to 20,000.
Racing are building a new 220 million euro 32,000-seat stadium in the La Defense business district. It should have opened in January but this has been put back to the end of the year.