HELSINKI (Reuters) - Finland's largest construction company YIT (HE:YTY1V) will acquire rival Lemminkainen (HE:LEM1S) in an all-share deal aimed at boosting growth, the firms said on Monday.
Lemminkainen shareholders will receive 3.6146 new shares in YIT for each share held, valuing Lemminkainen at 27.29 euros per share, a 40 percent premium to its Friday closing price.
The deal values Lemminkainen at 633 million euros (554.8 million pounds), based on Lemminkainen outstanding shares of 23.2 million, Reuters calculations showed.
YIT shareholders will have 60 percent of the combined company and Lemminkainen's owners 40 percent.
The combined company, with business mainly in Northern Europe, will have sales of around 3.4 billion euros and it is expected to generate annual synergies of about 40 million euros by 2020.
"The combination is expected to create significant value for the shareholders of the combined company through decreased sensitivity to economic cycles and improved competitiveness providing a strong platform for growth," the firms said in a joint statement.
The deal is subject to approvals by shareholder meetings, due on September, as well as authorities.
YIT was known as the biggest foreign builder in Russia, but its business was hurt by the Ukraine crisis and consequent recession in Russia, leaving the company to search new growth opportunities.