Two engineering giants have agreed to terms that will allow AECOM to acquire URS Corp. for approximately $6 billion.
The combined company will be a leading, fully integrated infrastructure and federal services provider with more than 95,000 employees in 150 countries.
“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,” said AECOM president and CEO Michael S. Burke. “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.”
URS Corp. chairman and CEO Martin M. Koffel said that the combination of the companies would benefit clients, stockholders and employees, as the combined company “will be better positioned to compete for major, complex projects across a diverse range of end markets and geographic regions,” he said.
“Our two businesses are complementary, and our cultures are highly compatible,” 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.”
The terms of the definitive agreement have been unanimously approved by the boards of directors of both companies. The transaction is subject to customary closing conditions, including regulatory approvals, approval by URS stockholders of the merger agreement and the approval by AECOM stockholders of the issuance of shares in the transaction. The transaction is expected to close in October.
AECOM will become one of the largest companies by revenue in the engineering and construction industry. The combined firm will be headquartered in Los Angeles and will be the largest publicly traded company in that city. AECOM also expects to maintain a key operational presence in San Francisco, where URS is headquartered.
Burke will be the combined company’s CEO, and the companies have designed a new operating management structure that will include proven senior leaders from both URS and AECOM. AECOM executive chairman John M. Dionisio will be chairman of the board and, at closing, AECOM will elect two URS board members to the AECOM board of directors.
“Building on AECOM’s experience of adding new skill sets and delivering them across our established global platform, we anticipate a smooth and seamless integration,” said Burke. “We are developing integration plans that will enable us to bring together the best of both organizations. The process will be led by executives of both companies.”
The combined company will be a fully integrated infrastructure firm, serving clients across a broad range of markets, including transportation, facilities, environmental, energy, water and government. The two companies are world leaders in the infrastructure industry.
URS adds to AECOM’s construction capabilities, deepening a core competency that AECOM expects to leverage across its global platform. URS also brings strong sector expertise in important end markets, including oil and gas, power and government services.