Engineering firm Downer EDI will pay $300 million to buy unlisted contractor Tenix Holdings.
Downer said the deal would give it exposure to the electricity, gas and water sectors.
"Tenix is a leader in the electricity, gas and water sectors in Australia and New Zealand," Downer chief executive Grant Fenn said.
"There is little overlap between the two companies and Tenix will be the foundation for a new core Utilities business for Downer."
Mr Fenn said the deal also opened up growth opportunities for the engineering business.
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"Tenix has played a leading role in driving efficiency from the privatisation of electricity networks in Victoria and South Australia, and is well placed to do the same in other states as power distribution assets are privatised," he said.
