Falkirk-based bus builder Alexander Dennis Limited (ADL) has bought a rival firm to become the UK's biggest bus and coach manufacturer.
The deal means the company will now employ 1,900 people
Alexander Dennis was formed three years ago when the business was rescued from administration.
The company, which employs 900 people in Falkirk, has bought Plaxton Holdings Ltd for an undisclosed sum. The new-look company will employ 1,900.
The firm said the deal establishes a £250m business.
It comes a month after Colin Robertson took over as chief executive at ADL.
At the time, he said he would be disappointed if the company did not "double its present size, at a minimum, within five years."
The company said the move will create a platform for entry into new European and global markets.
Mr Robertson said: "Alexander Dennis is currently outright market leader in the British bus sector - and has a worldwide reputation for double deck bus products - while Plaxton is by far and away the UK's most outstanding coach builder.
"Like ADL, it has experienced a remarkable turn-around in the past three years and re-established itself at the forefront of the industry.
"Importantly, we will continue to invest significantly in new bus and coach products, strengthening our in-house line-up while also forging strong alliances with international manufacturers."
He added: "We have taken an important step today, bringing together two companies with complementary products and remarkable synergies."
Brian Davidson, chairman of Scarborough-based Plaxton Holdings Limited, led a management buy-out of Plaxton when Mayflower went into administration in 2004.
Since then he has rebuilt the business, taking it from a turnover of around £45m to over £60m.
"This is a positive step for both companies," he said. "It brings together like-minded people who know the British bus and coach business inside out - and who are enthusiastic about taking both businesses to a new level.
"The move will enable us to raise our sights beyond the immediate horizon and to view a broader canvas of opportunity."
Apart from its Falkirk staff, ADL also employs almost 300 people in Guildford, Surrey, and 200 in its worldwide aftermarket operations.
Plaxton currently employs over 500 people at its Scarborough and Anston facilities in South Yorkshire.