Costain and May Gurney have announced a deal to merge the two businesses subject to full shareholder approval. Costain will acquire the entire issued and to be issued ordinary share capital of May Gurney in a deal worth £178M.

Combined order book for the Costain May Gurney business will be £3.9Bn and combined revenues approximately £1.6Bn a year.

Current Costain chief executive officer Andrew Wyllie will lead the combined group and Costain finance director Tony Bickerstaff will take on the role of combined group finance director.

The merger will bring together two businesses with complementary service offerings to create one of the UK’s leading providers of infrastructure including rail, highways and local government services, Costain said.

Costain non executive chairman David Allvey said: “The Costain strategy has been extremely clear: to become a leader in the design, delivery and maintenance of national infrastructure. The announcement is a highly significant step in that process. We see this coming together of two established UK companies as good news for all our stakeholders. Our customers are increasingly demanding a broader range of integrated services and this powerful combination will enhance our status as a tier one engineering solutions provider.”

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