Carillion has acquired McAlpine for £572 million in cash and shares.

Carillion and McAlpine have agreed to a £572 million cash and share merger to create a giant UK construction and support services giant with an annual turnover of £4.7 billion.

Carillion will pay 558p a share for Alfred McAlpine, down from the initial price of 585p provisionally agreed in October.

The drop is understood to reflect continued uncertainty in the financial markets, which has wiped around £10bn off the share price of housebuilders and contractors in the UK.

The offer price of 558p represents a premium of:
• 24% over the closing price for McAlpine shares on 1 August (449p) which was the last day before McAlpine announced its demerger plans.
• 5% over the closing price on 15 October (532p), the last day before Carillion’s approach was first officially announced.

Commenting on the acquisition, Philip Rogerson, Chairman of Carillion, said: “The acquisition of Alfred McAlpine represents a further step in Carillion’s development and its successful strategy for sustainable and profitable growth.

“There is an excellent strategic fit between the two companies and the combined group will be one of the UK’s leading support services businesses with enhanced capabilities in providing integrated solutions and construction services.”

The enlarged group’s main two operations will be support services – combined turnover running to £2.3bn, and construction services – combined turnover also running to £2.3bn. The company said that it would target “higher margin projects” after the takeover. It said that the deal would also enhance Carillion’s capacity for growth in the Middle East.

Roger Urwin, chairman of Alfred McAlpine said: “Over the past five years we have repositioned Alfred McAlpine into a valuable support services group, with leading positions in a number of growth markets. Carillion’s offer recognises this value.”

There are expected to be annual cost savings of £30m a year by the end of 2009, the first full year after completion of the acquisition.