Ricardo has headquarters in the UK and operates across 20 countries employing 2,700 staff.

The firm has been undergoing a restructuring to concentrate on its environment and energy and rail business and WSP said its more niche Automotive and Industrial and Performance Products divison is “likely” to be sold.

Alexandre L’Heureux, President and CEO of WSP said: “The proposed acquisition of Ricardo perfectly aligns with WSP’s vision for sustainable, compounding growth and our clear ambitions to expand in advisory, energy transition, water solutions, and the rail sector over the next three years.

“We are poised to enhance our ability to deliver innovative solutions as we combine our global reach and resources with Ricardo’s complementary expertise.

“Moreover, the shared entrepreneurial spirit and technical excellence between our teams position us to create further value for our clients. We look forward to welcoming Ricardo’s talented professionals to WSP and seizing new opportunities with our broadened service offering.”

Mark Clare, Chair of Ricardo, said: “Ricardo has made significant progress with its strategy to transform the business into a world leading environmental and energy transition consultancy, with its prospects underpinned by global mega trends supportive of long-term growth.

“However, while good progress has been made, there are further steps required to complete the transformation which bring some execution risks against the background of short-term market challenges and the uncertain geopolitical and macroeconomic backdrop.

“Against this background, WSP has made a compelling offer which represents a highly attractive premium to recent average trading levels and provides certain value in cash today for Ricardo shareholders. Importantly, the Ricardo Directors believe that the Acquisition will provide enhanced career opportunities for Ricardo’s employees within the WSP Group as well as access for our clients to a broader service offering.”