Mergers and Acquisitions in the Engineering & Architecture Sectors

Mergers and acquisitions (M&A) have long been pivotal in shaping the engineering and architecture sectors, serving as catalysts for growth, diversification, and innovation. The frequency and scale of these deals have varied over time, influenced by economic conditions, technological advancements, and strategic imperatives.

About the engineering and architecture sectors

The engineering and construction industries form the backbone of global infrastructure, driving economic growth and societal development. These sectors encompass a vast range of disciplines, including civil, mechanical, electrical, and environmental engineering, alongside architecture and project management.

Engineering firms design, plan, and innovate, while construction companies bring these visions to life, creating everything from skyscrapers and bridges to transportation networks and energy facilities. As urbanization accelerates and sustainability becomes a top priority, the industry is increasingly integrating digital technologies, green building practices, and advanced project delivery methods to enhance efficiency and reduce environmental impact.

Despite challenges such as labor shortages, regulatory complexities, and economic fluctuations, the sector continues to evolve, playing a critical role in shaping the modern world.

Frequency of M&A Activities

In recent years, the engineering and construction industries have witnessed a notable surge in M&A activities. For instance, in the first quarter of 2024 alone, there were 21 mega-deals, up from 16 in the previous quarter. This uptick underscores a broader trend of consolidation within the sector.

Drivers Behind M&A Activities

Several key factors drive M&A activities in the engineering and architecture industries:

1. Market Expansion: Firms often pursue acquisitions to enter new geographic markets or sectors. For example, Jacobs Engineering Group’s acquisition of CH2M Hill in 2017 expanded its presence in infrastructure and government services.
2. Diversification of Services: Acquiring firms with complementary services allows companies to offer comprehensive solutions. AECOM’s purchase of URS Corporation in 2014 aimed to create a “one-stop shop” for construction and engineering services.
3. Technological Advancement: The integration of advanced technologies is a significant motivator. Siemens’ agreement to acquire simulation software company Altair for $10.6 billion in 2024 exemplifies a move to bolster digital capabilities.
4. Economies of Scale: Mergers can lead to cost efficiencies through shared resources and streamlined operations. The merger between Germany’s Hochtief and Spain’s ACS in 2024, combining their U.S. subsidiaries Flatiron and Dragados, aimed to create the second-largest civil engineering and construction company in the United States.

Notable M&A Deals Across Continents

Here is a list of some of the largest M&A deals in the engineering and architecture sectors:

1. Siemens and Altair (2024, Europe/US): Siemens agreed to acquire simulation software company Altair for $10.6 billion to enhance its industrial software capabilities.
2. Jacobs Engineering and CH2M Hill (2017, US): Jacobs acquired CH2M Hill for $3.3 billion, strengthening its position in infrastructure and government services.
3. Wood Group and AMEC Foster Wheeler (2017, Europe): Wood Group acquired AMEC Foster Wheeler for approximately $2.7 billion, creating a global leader in engineering and technical services.
4. AECOM and URS Corporation (2014, US): AECOM purchased URS for $6 billion to offer integrated design, build, finance, and operate services.
5. WSP Global and Parsons Brinckerhoff (2014, Canada/US): WSP acquired Parsons Brinckerhoff for $1.24 billion, significantly expanding its global footprint.
6. Fluor Corporation and Stork Holding (2015, US/Europe): Fluor acquired Netherlands-based Stork Holding for $755 million to enhance its maintenance and asset integrity services.
7. GHD Group and Conestoga-Rovers & Associates (2014, Australia/Canada): GHD merged with Conestoga-Rovers, creating a company with 8,500 employees and $1.5 billion in revenue.
8. Bentley Systems and Seequent (2021, US/New Zealand): Bentley Systems acquired Seequent, a leader in 3D modeling software for geosciences, for $1.05 billion.
9. WSP Global and Golder (2020, Canada): WSP acquired Golder, a global engineering and consulting firm, for $1.14 billion to strengthen its environmental services.
10. Stantec and MWH Global (2016, Canada/US): Stantec acquired MWH Global for $793 million, enhancing its water and infrastructure capabilities.

Successes and Challenges

While many M&A deals have achieved strategic objectives, others have faced challenges. For instance, the acquisition of AMEC Foster Wheeler by Wood Group in 2017 was intended to create a global leader in engineering and technical services. However, the integration process faced challenges due to overlapping operations and cultural differences.

Strategic Decisions and Reasoning

Strategically, firms engage in M&A to achieve several objectives:

• Geographic Diversification: Entering new markets to mitigate regional economic downturns.
• Service Portfolio Expansion: Offering a broader range of services to clients.
• Technological Advancement: Acquiring firms with advanced technologies to stay competitive.
• Risk Mitigation: Diversifying revenue streams to reduce dependence on a single market or service.

Recent Activities

In 2024, the engineering and architecture sectors experienced a series of significant mergers and acquisitions, reflecting ongoing trends in market consolidation, technological advancement, and strategic expansion. Notable transactions include:

1. Siemens’ Acquisition of Altair (October 2024): Siemens agreed to acquire simulation software company Altair for $10.6 billion, aiming to enhance its industrial software capabilities.
2. Blackstone’s Acquisition of Westwood Professional Services (August 2024): Blackstone acquired a majority stake in Westwood, an engineering firm specializing in renewable energy, public infrastructure, and property. This move aligns with the growing demand for services supporting the transition to clean energy.
3. WSP Global’s Purchase of Power Engineers (August 2024): Canadian firm WSP Global announced its plan to acquire U.S.-based Power Engineers for $1.78 billion. This acquisition aims to strengthen WSP’s position amid increasing investments in energy transition infrastructure.
4. Smiths Group’s Acquisition of Modular Metal Fabricators and Wattco (September 2024): British engineering firm Smiths Group expanded its presence in the Americas by acquiring these two North American firms for a combined £110 million, integrating them into its Flex-Tek division.
5. Ricardo’s Divestment of Its Defense Division (October 2024): Historic British engineering company Ricardo announced plans to sell its defense division to focus more deeply on green energy initiatives, reflecting a strategic shift towards environmental and energy transition markets.
6. MTM Engineering’s Acquisition Trail (October 2024): Ireland-based MTM Engineering, following a significant investment from Dutch private equity firm Waterland, acquired several companies including CET Connect, ATSS Ventures, and TA Ronan, expanding its operations across Europe.
7. Assemblin and Caverion Merger (April 2024): Assemblin and Caverion, both prominent in building services and industrial solutions in Northern and Central Europe, merged to form the Assemblin Caverion Group, creating a combined entity with approximately 21,500 employees and a revenue of €3.8 billion.
8. Colliers Engineering & Design’s Partnership with MG2 Corporation (December 2024): Colliers expanded its architectural and strategic planning capabilities by partnering with Seattle-based MG2 Corporation, enhancing its footprint in the U.S. Northwest.
9. Gannett Fleming and TranSystems Merger (August 2024): Gannett Fleming merged with TranSystems, creating a combined organization with approximately $1.3 billion in revenue and over 5,000 employees, aiming to enhance their service offerings in the transportation sector.
10. Stantec’s Acquisition of Hydrock (May 2024): Global design and engineering firm Stantec acquired UK-based Hydrock, adding 950 professionals and increasing its UK workforce by more than 30%, thereby strengthening its integrated engineering and design services.
11. Turner & Townsend’s Partnership with Jumbo Consulting Group (May 2024): Turner & Townsend partnered with Jumbo Consulting Group to support expansion into the clean energy sector, particularly focusing on offshore wind projects.

These transactions underscore the industry’s focus on expanding capabilities, entering new markets, and embracing sustainable and technological advancements.

The M&A landscape in the engineering and architecture sectors continues to evolve, driven by strategic expansion, technological advancements, and the increasing demand for sustainable infrastructure. The frequency of deals highlights a strong industry-wide push for consolidation, efficiency, and diversification. While many transactions have led to successful market positioning and growth, others have faced integration challenges and market shifts.

The recent surge in 2024 and 2025 acquisitions, particularly in clean energy, digital engineering, and global infrastructure, reflects a forward-looking approach by industry leaders. As companies navigate economic uncertainties and regulatory landscapes, M&A will remain a key tool for staying competitive, fostering innovation, and shaping the future of the built environment.