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Canada

WSP Global approaches rival engineering firm Aecom about possible deal

Canada’s WSP Global Inc. has approached rival engineering services firm Aecom about a possible deal, according to people familiar with the matter.

There’s no guarantee that the overture will lead to a transaction, said the people, who asked to not be identified because the matter isn’t public.

Representatives for Los Angeles-based Aecom and Montreal-based WSP didn’t immediately respond to requests for comment.

Aecom, which rose 3.4 per cent in late trading Monday, has a market value of about $9.6 billion while WSP has a market value of $9.9 billion.

Aecom, which had been targeted by activist investor Starboard Value last year, agreed in October to sell its management services division to a group of private equity firms for $3.1 billion.

Aecom’s services include consulting, planning, architecture, engineering and construction management, according to its website.

While it has a growing backlog thanks to a steady stream of government and infrastructure contracts, profits have stagnated in recent years due to inefficiencies and construction contract losses, according to a Bloomberg Intelligence report in December.

WSP, another large design and engineering services player, has been expanding aggressively through deals. It closed an acquisition in December of Ecology and Environment Inc., a month after announcing that it had purchased Elton Consulting Group Pty Ltd.

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