SNC-Lavalin has offered £20.80 per share for a £2.1bn takeover of Atkins, with both boards having agreed terms on the deal.
The Canadian group announced that it had reached agreement on the terms of the deal, which will see Atkins chief executive Uwe Krueger depart, with group finance director Heath Drewett to lead Atkins within the enlarged group.
Further bids had been anticipated for Atkins and could still occur, but the Canadian giant has moved to agree terms on the deal before the cut-off deadline of 1 May.
Atkins has 18,000 employees and posted revenue of around £2bn in 2016. The enlarged group will have more than 50,000 employees and combined revenue of more than £7bn.
SNC-Lavalin said a review of the Atkins business will take place after completion of the deal ”to determine any organisational and structural changes that should be implemented to benefit the combined entity”.
The group did not expect the review to have “a material impact on the continued employment of Atkins’ employees”, it added.
Combining the groups would lead to an expected £70m of cost savings within the first full financial year, the Canadian group said, including from shared services and “office consolidation where appropriate”.
The acquisition will be funded through a mixture of debt and equity, including an £870m loan and a £350m draw on its current credit facility.
Once the deal is approved by shareholders, SNC-Lavalin expects the acquisition to be completed by the third quarter of 2017.
SNC-Lavalin president and CEO Neil Bruce said: “We are very pleased to announce this proposed acquisition that is fully aligned with our growth strategy, creating a global fully integrated professional services and project management company – including capital investment, consulting, design, engineering, construction, sustaining capital and operations and maintenance.
“By combining two highly complementary businesses, we will increase our depth and breadth of services to position us as a premier partner to public and private sector clients.
“It also creates new revenue growth opportunities in key geographies by positioning us to capitalise on increased cross-selling and the opportunity to win and deliver major projects in new regions.
“I look forward to welcoming Atkins’ employees into our combined company. Together, we will become part of a larger global organisation that will open the door to new opportunities for further growth and development.”
Atkins is shortlisted for the CN Construction Consultancy of the Year award at this year’s Construction News Awards.
Canadian giant agrees terms on £2.1bn Atkins takeover