The American engineering consultancy giant CH2M has approached Atkins about a possible £3bn-plus merger, according to reports.
The two firms already work closely together on some of the crown jewel projects in UK infrastructure, including HS2, the Thames Tideway Tunnel supersewer, Crossrail 2 as well as roads projects for Highways England.
CH2M is believed to have made a senior level approach to its British rival to explore a possible tie-up, which would allow the two companies to exploit their dominant coverage of separate markets, The Times reports.
A merger would bring CH2M’s significant US coverage together with Atkins’ major presence in the UK and European markets, including Scandinavia, where Atkins is a top engineering and design consultancy.
The move follows CH2M’s purchase of the British engineering firm Halcrow in 2011.
The US firm employs roughly 25,000 employees in more than 50 countries, with around £4.3bn revenue, while Atkins has more than 18,000 employees with a £1.8bn in turnover.
Atkins increased its reported pre-tax profit to £131.1m last year, up from £106.7m. It is valued on the London stock exchange at £1.6bn.
Its half year results for the six months ended 30 September 2016, show Atkins doing good business, with a ‘significant increase in UK and Europe profit, up 32.2% supported by strong markets and improved operational delivery’.
Its revenue was up 10.0% to £994.7m, up 4.0% on a constant currency basis, while underlying operating profit was up 10.7%, underlying constant currency operating profit up 4.3%
Uwe Krueger, Atkins’ chief executive officer, said: ‘Despite challenges in some markets, we have delivered good underlying profitability and the near term outlook in our UK and North American businesses is particularly positive. We are confident that our focus on differentiation in nuclear, digital innovation and advisory will deliver further growth over the longer term. Our outlook for the full year is unchanged.’