Construction firm Costain will acquire infrastructure and maintenance company May Gurney for approximately £177m in an all-share deal, the firms have announced.

Each May Gurney Shareholder will receive 0.8275 new Costain Shares for every Scheme Share held, resulting in Costain Shareholders holding approximately 53%, and May Gurney Shareholders holding approximately 47% of the issued share capital of Costain at the time the Merger becomes effective.

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The Merger will bring together two businesses with complementary service offerings to create one of the UK's leading integrated services providers to the rail, highways, water, waste, airports, hydrocarbons, power, nuclear, local government and fleet management sectors.

Baroness Margaret Ford, Non-executive Chairman of May Gurney, said: "May Gurney and Costain have highly complementary businesses. The markets in which we operate offer tremendous opportunities for future growth. The combination of our two companies and the strong heritage we bring will position us very well to respond to those opportunities. Our objective is to deliver even stronger partnerships with our clients, superior returns for our shareholders and increased opportunities for our staff."

(CD)