COMPANY MERGER: Engineering outsourcing firm Costain says it will bid for bigger projects after signing a £370m merger deal with road and rail maintenance company May Gurney.

About 150 jobs will be cut from a combined workforce of 11,000 as the group looks to save £10m a year from the all-share deal.

The companies will have combined revenues of £1.6bn.

Costain is working on London's Crossrail underground rail tunnel and is based in Maidenhead, in Berkshire, which will be the group's headquarters.

MERLIN SALES: Merlin Entertainments, the company behind theme park Alton Towers, the London Eye and Madame Tussauds, has seen annual sales hit £1bn for the first time.

The private-equity owned firm said 54m people visited its attractions last year, which was a 16 per cent increase, but revealed underlying performance was hit by poor weather, the tough economic climate and the impact of the London Olympic Games.

Total revenues were 16 per cent higher at £1.1bn, with operating profits rising to about £260m.

INSURANCE FINE: Insurance firm Prudential has been fined £30m over its bid to buy a subsidiary of US insurer AIG.

The Financial Services Authority (FSA) said Prudential had failed to inform it of its plans to buy AIA.

The £23bn deal failed after shareholder opposition.

The FSA said it should have had more time to make a decision on the deal, saying Prudential's proposed £14.5bn rights issue to fund the purchase would have significantly changed the company's risk profile.

ECONOMY DROP: The UK economy contracted at the end of 2012, with industrial production falling to a quarterly high last seen in 2009, according to a new report.

The Office for National Statistics said gross domestic product dropped 0.3 per cent between October and December, which came after a 2.1 per cent fall in industrial production.

The figures come after the Government said it expected UK growth to rise to 0.6 per cent, half of what it predicted last year.

PROFITS RISE: Insurance market Lloyd's of London has returned to profit, despite having to pay one of the biggest claims in its history.

The company paid out £1.4bn after Superstorm Sandy hit the Caribbean and North America in October 2012.

However, bosses said the firm had still made pre-tax profits of £2.7bn, reversing a loss of £516m in 2011.

It said claims had fallen to £10.1bn from £12.9bn, with gross premiums reaching a record high of £25bn.