Downer says it is buying the Australian utilities company, Tenix, for $A300 million.
Downer's chief executive, Grant Fenn, said Tenix, which operates on long term operations and maintenance contracts, has strong, long term relationships with some of the largest utility businesses in Australia and New Zealand.
Mr Fenn said it is an excellent strategic fit with good growth prospects as the electricity sector in Australia continues to be privatised.
He said there's little overlap between Downer and Tenix and that Tenix will be the foundation for a new core utilities division for Downer.
Tenix also designs, constructs and maintains water and waste water treatment plants for a number of municipal councils. Downer will fund the purchase using its existing banking facilities.