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Last Updated: Monday, 10 December 2007, 14:50 GMT
Carillion agrees to buy McAlpine
Workers (Picture from McAlpine)

UK building and support services firm Carillion has agreed to buy rival Alfred McAlpine in a 572m deal.

The takeover will create one of the largest support services and construction firms in the UK with a combined revenue of about 4.7bn.

Carillion is offering 558p per share for McAlpine, made up of 165.4p in cash and 1.08 new Carillion shares.

"There is an excellent strategic fit between the two companies," said Carillion chairman Philip Rogerson.

The deal's success now depends on the approval of shareholders of both firms.

Carillion said it had already received favourable responses from McAlpine directors and investors representing 17.9% of the issued shares in the company.

The firms expect the enlarged group to achieve cost savings of at least 30m by the end of 2009, the first full year after the completion of the acquisition.

The cash-and-shares offer was slightly less than the 600m takeover proposal proposed in November, which analysts put down to the continued stress in financial markets over the past month.

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