WSP Global Inc. agreed to buy Parsons Brinckerhoff, designer of New York City’s first subway line, for $1.24 billion in cash from British builder Balfour Beatty Plc, extending the Canadian engineering company’s reach in the U.S. and Australia.

The agreement also calls for Montreal-based WSP to contribute $110 million that will be retained by Parsons Brinckerhoff, the companies said yesterday in separate statements.

Balfour Beatty, the U.K.’s largest construction company, bought Parsons in 2009 for $626 million to expand outside its home market. Last month it rejected a merger with Carillion Plc, citing the British rival’s insistence that Balfour call off plans to sell New York-based Parsons, which Balfour said “has not provided synergistic benefits.”

WSP said it expects the acquisition to immediately boost earnings per share by a “mid-single digit” percentage, “increasing to the mid-teens once synergies are fully realized” in two years. It said the purchase will let it expand in countries where it has a limited presence, such as the U.S. and Australia, as well as in the U.K., where it’s already present on a larger scale.

London-based Balfour said it plans to return as much as 200 million pounds ($329 million) of the proceeds to shareholders and use about 85 million pounds to reduce its pension-fund deficit.

Balfour shares rose as much as 3.7 percent in London trading, valuing the company at 1.7 billion pounds, and were up 2.5 percent as of 8:11 a.m.

Balfour said the sale requires its shareholders’ backing, as well as antitrust and other approvals. The companies said they expect to complete the transaction in the fourth quarter this year.

WSP said Barclays Plc and Canadian Imperial Bank of Commerce were its financial advisers. Goldman Sachs Group Inc. was Balfour’s lead financial adviser, and Bank of America Merrill Lynch also provided advice, Balfour said.

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