This 2 arm study will compare the safety, tolerability and efficacy of aleglitazar and Actos in patients with type 2 diabetes and symptomatic NYHA class II heart failure. Eligible patients will be randomized to receive either aleglitazar, titrated to an individual maximum tolerated dose up to 0.3mg p.o. daily, or Actos, titrated to an individual maximum tolerated dose up to 45mg p.o. daily, in addition to prescribed diabetes therapy where applicable. The anticipated time on study treatment is 3-12 months, and the target sample size is 100-500 individuals.

Inclusion Criteria:

• adult patients, >=18 years of age;
• type 2 diabetes for >=1 month;
• drug naive, or receiving stable doses of <=2 oral antihyperglycemic medications;
• HbA1c 6.5-10.0% at screening;
• symptomatic, stable NYHA class 2 heart failure at screening.

Exclusion Criteria:

• type 1 diabetes;
• current or previous treatment with insulin;
• uncontrolled hypertension;
• NYHA class 1, 3 or 4 at screening.