A merger between two European construction giants has created the second-largest civil engineering and construction company in the United States.

ACS Group and Hochtief, the respective owners of Dragados and Flatiron Construction, announced on July 30 that they have agreed on key terms for the combination of the two companies.

Nearly 62% of the ownership of the integrated company will be held by ACS Group and the remainder by Hochtief.

The new company, named Flatiron Dragados, will be managed by Chairman Peter Davoren (who also serves as Chairman, CEO & President of Turner) and the current CEO of Flatiron, Javier Sevilla, as CEO.

The boards of Hochtief and ACS have approved the transaction, but it will be finalized later in 2024, the firms said.

"The operation aims to simplify the group's structure of the civil engineering activity in North America, facilitate the relationship with different stakeholders and promote administrative and financial synergies," ACS said in a release. 

At the end of the first half of this year, the integrated business boasted a project a backlog of US$17.2 billion and revenue of US$3.1 billion. It has a long-standing presence in 24 states of the United States and eight Canadian provinces.

Dragados Canada is currently working on a number of major projects across Ontario, including Ottawa’s Confederation Line light rail expansion and the Eglinton Crosstown East Tunnels in Toronto.

“Bringing together Flatiron and Dragados creates a strong platform for organic growth in North America,” said Hochtief CEO Juan Santamaría. “Flatiron and Dragados North America employees have a long history of working together. The new company will have the most respected and recognized value proposition in its sectors, having delivered renowned projects across the United States and Canada, and can look forward to an even stronger future.”

There had already been close links between the companies. Flatiron and Dragados have also been joint venture partners and currently are in a joint venture as prime contractor for Harbor Bridge in Corpus Christi, Texas, and for Construction Package 2-3 of the California High Speed Rail project.