The trend of consolidation among engineering and construction (E&C) companies rolls on. In addition to AMEC’s acquisition of Foster Wheeler and Martin Marietta’s purchase of Texas Industries earlier in the year, two more key players are joining forces. As reported by Reuters this week, Los Angeles-based AECOM Technology Corp. announced its plans to acquire San Francisco-based URS Corp. AECOM indicated it would pay $56.31 a share in cash and stock for URS. This along with the assumption of URS debt puts the value of the deal at the $6 billion mark. Once it closes in October, this would create a combined company with over 95,000 employees in 150 countries and approximately $19 billion in annual sales.

AECOM shared that the combination would make it one of the largest companies based on revenue in the E&C industry and the largest publicly-traded company based in Los Angeles. According to the Los Angeles Times, AECOM’s CEO indicated he expects to add to the 1300 employees already working for both companies in the greater Los Angeles area. This is good news for Los Angeles, because the area has had notable companies move to other parts of the country in recent months. Toyota Motor Corp. announced in late April that it would close its Torrance headquarters and relocate 3,000 jobs to Texas. This came shortly after Occidental Petroleum announced it was moving its headquarters to Houston.

URS offers engineering, construction and technical services to companies and U.S. federal organizations (e.g., the U.S. Army and the Department of Energy). AECOM provides architecture, design, engineering, and construction services to public and private clients. Noteworthy projects include the new World Trade Center, the design for a new subway in Manhattan and the complex for the 2016 Summer Olympics in Rio de Janeiro. The combination gives AECOM a substantial presence in the power distribution and oil and gas sectors, which made up nearly 40% of URS’ revenue last year. AECOM will also benefit from URS’ expertise in federal contracting which made up 34% of URS’ revenue.


Ryan Lahti is the founder and managing principal of OrgLeader, LLC. Stay up to date on Ryan’s STEM-based organization tweets here: @ryanlahti