Engineering services firm Babcock International has secured Southampton-based VT Group in a ??1.3 billion cash-and-shares deal sure to catch the attention of job-hunting graduates.
Defence services specialist VT has agreed to the rival firm's revised bid after resisting takeover attempts several times in the past.
It said the latest recommended offer was "fair and reasonable" and that directors would unanimously recommend its approval.
Babcock said the enlarged group would have a broader range of expertise and would result in merger benefits of around ??50 million a year, with additional annual financial efficiencies of ??8 million.
The firm said the enlarged group would be better able to take on bigger and more complicated contracts.
Shareholders of VT, formerly Vosper Thornycroft, will own around 36% of the merged group if the deal is approved, as expected, by the end of July.
VT chairman Mike Jeffries said: "The VT board believes that Babcock's offer represents an attractive proposition for VT shareholders both through the immediate offer premium and through the opportunity to benefit from the synergies."
VT specialises in defence, communications and educations and skills services, while engineering group Babcock has a global workforce of 17,000 and reported revenues of almost ??2 billion last year.
