Engineering and design firm AECOM acquires URS Corp.

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Engineering, construction and design firm AECOM has announced it will acquire all outstanding shares of the URS Corporation for US$56.31 per share in cash and stock.

The deal, announced earlier this week, "accelerates AECOM's strategy of offering an integrated-delivery model by adding key capabilities and expertise in markets including construction, oil & gas, power and government services," the Los Angeles-based company said in a statement.

AECOM will pay about $4 billion for the outstanding URS shares, based on the closing share price as of July 11, 2014. Including the assumption of URS debt, the total value of the transaction is approximately $6 billion.

"This combination creates an industry leader with the ability to deliver more capabilities from a broad global platform to reach more clients in more industry end markets," AECOM president and CEO Michael S. Burke said. "Clients, employees and stockholders of both companies will benefit from the opportunities created by these expanded capabilities, broad global reach in key growth markets and economies of scale.

"In one step, we will dramatically accelerate our strategy of creating an integrated delivery platform with superior capabilities to design, build, finance and operate infrastructure assets around the world."

The acquisition will make AECOM (NYSE: ACM) one of the largest engineering and construction companies in the world in terms of revenue, with the combined firm to be headquarter and publicly traded in Los Angeles. AECOM said it also expects to maintain a "key operational presence" in San Francisco, where URS is headquartered.

"Our two businesses are complementary, and our cultures are highly compatible," URS (NYSE: URS) chairman and CEO Martin M. Koffel said. "We anticipate that employees from the combined company will benefit as the organization integrates its leadership talent and capitalizes on its greater scale to invest in its people, improve their career opportunities and advance their capacity to compete globally."

Combined, the companies will companies will have more than 95,000 employees in 150 countries. Data from calendar year 2013 show the group would have had pro forma revenues of more than $19 billion and EBITDA of about $1.3 billion.

Though the terms of the agreement have been unanimously approved by the boards of directors of both companies, the transaction is still subject to customary closing conditions, and regulatory and stockholder approvals. The deal is expected to close in October.

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