WS ATKINS and Bovis are planning a merger to create a 2bn a year, global, one-stop shop construction services business.
The newly merged group would combine Bovis' massive international construction and project management operation with WS Atkins' design and facilities management business.
The new business would be able to bid independently for design, build, finance and operate projects without having to form consortia with other companies.
WS Atkins is expected to buy Bovis from its parent P&O, although P&O is expected to retain a large stake in the new group.
WS Atkins chief executive Mike Jeffries said the talks were sparked by increasing demands from clients for engineer/procure/construct services coupled with operation and maintenance contracts. The new business will be able to offer all of these as a single package.
A merger will also allow Atkins and Bovis to share their client bases. At present the two groups have few common clients, even though Atkins' client base includes 70 of the FTSE 100 companies and Bovis works for large multinationals like BP, Philip Morris and Marks & Spencer.
A merger would give Atkins access to the US, where it has a limited presence. Lehrer McGovern Bovis is one of the biggest fee contractors in the US.
The merged company would employ around 13,700 staff. Its main competitor on the world market is likely to be contractor/project manager Bechtel.