Sinclair Knight Merz will reportedly be party to a $1 billion merger with US firm Jacobs Engineering, in what is set to be one of the biggest deals this year for the global engineering sector.

An unnamed source told The Australian over the weekend that the deal between the Australian engineering giant and Jacobs Engineering is now set to go head, with an announcement likely to be made within the next two weeks.

SKM had previously enlisted investment bank Greenhill as its adviser for the deal, which has long been rumored to take place.

Sinclair Knight Merz, which was founded in 1964, is a stalwart of the Australian engineering sector which has recently striven to establish itself as a major global player.

The company remains held in private hands, with equity divided amongst 660 shareholders. Its current annual revenue is around $1 billion, and its earnings before interest, tax, depreciation and amortisation are approximately $180  million.

While the company has established over 40 offices around the world and participated in a raft of landmark overseas projects – including the El Teniente copper mine in Chile, the Athens Olympic Stadium and the Roundhouse performing arts and concert venue in London, Australia remains the mainstay of its operations, accounting for around three quarters of total earnings.

The group is eager for further opportunities to expand overseas, and according to The Australian’s source feels it needs to obtain additional scale to advance its prospects abroad.

New York-listed Jacobs Engineering is a California-based firm which industry observers say is similar to SKM. The company is interested in expanding its Australia-based operations, creating a situation in which it shares a set of complimentary interests with its potential merger partner.

The company’s turnover last year was approximately USD$11 billion.

If it goes ahead the transaction will be one of very few to exceed the billion dollar threshold in the international engineering space, and is expected to have a transformational impact upon the global industry.

Other companies who are believed to have previously expressed interest in a deal with SKM include Australia’s WorsleyParsons, US-based SAIC and the UK’s Amec.