The enlarged group is now a major player in the local authority outsourcing market.

Kier now services 65 local authorities, employ 16,000 staff, collects rubbish for 3.3m households, and repairs 900,000 council homes a year.

It will also maintain 35,000km of roads and 500,000 street lights.

Phil White, chairman of Kier, said: “Scale, performance and reputation are three essential elements of a successful services business.

“The combination of Kier and May Gurney has all three and is a natural fit.”

Kier has implemented a recruitment freeze sine the deal was recommended and aims to lay off around 200 staff to help generate annual savings of £20m by 2016.

The deal is expected to cost around £28m in one-off costs, £8m of this sum from the implementation of new IT systems.

Kier said: “In anticipation of completion, we have been working closely with May Gurney to ensure an effective integration of the two businesses.

“In particular, we have been focusing on ensuring that the delivery of services to clients by the enlarged group remains unaffected, risk management processes are adopted consistently across the entire business and that the available operational efficiencies are realised in line with the integration plan.”