Automated trading firm Getco Holding is planning to acquire rival Knight Capital Group Inc in a deal valued at $1.4 billion.

The acquisition will result in the creation of a major player in the market and will help Knight Capital sustain its business processes under Getco Holding. Knight Capital faced a collapse in August after a software issue in its systems. The deal is expected to be closed on April or early May and will help Getco expand its presence in the market and compete better with rivals like Virtu Financial.

Knight is a leading market maker in the US and it uses computer models to match buy and sell orders in stocks and options. Knight was facilitating as much as 10 percent of all equity trading volume in the US.

Knight's also has a presence in the foreign exchange and bond trading platforms and it controls 20 per cent of US equities exchange Direct Edge.

Getco is one of the largest high-frequency trading firms and it also has making operations, which are expected to be significantly boosted following the acquisition. Getco maintains a strong presence in the automated trading FX market and has been working to expand in agency brokerage operation.

Getco chief Daniel Coleman is expected to be the leader of the merged entity while Knight CEO Tom Joyce will be executive chairman. The two said that they have already started working on the strategic outlook for the firm and indicated that it will be a publicly traded entity.