Costain said it will bid for bigger and more complex projects after unveiling a £370m merger with road and rail maintenance firm May Gurney.
About 150 jobs will be cut from a combined workforce of 11,000 as the group looks to save £10m a year from the all-share deal.
The companies will have combined revenues of £1.6bn and challenge rivals including Balfour Beatty and Carillion.
Major infrastructure contractor Costain, which is working on London’s Crossrail underground rail tunnel, is based in Maidenhead, which will be the group’s HQ.
The group plans to retain May Gurney’s headquarters in Trowse, Norwich, as a shared services base. May Gurney has around 800 of its workforce in Norfolk.
Costain’s directors will take the top jobs in the enlarged company, with its chief executive Andrew Wyllie continuing in that role. Costain finance director Tony Bickerstaff and chairman David Allvey will keep their positions.
Mr Allvey said: “We see this coming together of two established UK companies as good news for all our stakeholders.
“Our customers are increasingly demanding a broader range of integrated services and this powerful combination will enhance our status as a tier one engineering solutions provider.”