Fletcher Building will buy road construction and maintenance business Higgins for $315 million.
It will acquire the country's third largest participant in the sector and anticipates the deal will be completed by the end of June.
Fletcher Building separately announced it will restructure into five divisions.
The Higgins deal involves its road construction and maintenance operations in New Zealand, including asphalt and bitumen plants, road construction and maintenance operations in Fiji, aggregate business including 16 operational quarries, and other related businesses.
Excluded from the deal are Higgins' ready-mix concrete and property businesses.
Fletcher Building chief executive Mark Adamson said he had signalled for some time a desire to expand into road construction and maintenance which the company sees as a significant opportunity.
Higgins was an obvious choice, he said, as Fletcher had already partnered with it on road construction projects for the past 25 years.
The acquisition is being funded from existing cash and debt facilities and is conditional on a number of factors including Overseas Investment Office and Commerce Commission approval.
Last week Fletcher announced it had OIO approval for its sale of Rocla Quarry Products to Hanson Construction for a post-tax profit of $85m which will be booked in the 2016 financial year.
Fletcher said changes to its business portfolio, including the purchase of Higgins and sale of Rocla, required a new structure which will see the business organised into five divisions.
Building products, international, distribution, residential and land development and construction will each have a chief executive.
It has also created a new role of chief transformation officer to focus on speeding up growth and cost reduction initiatives.
Financial results for the half year to December 31, 2015 will be reported on the basis of the new divisional structure.