INTERNATIONAL project management group Amec yesterday announced the disposal of its loss-making project services division, which has offices in the North-East.

Construction and urban regeneration group Morgan Sindall plc is to acquire Amec's Design and Project Services Limited (DPS) business, which employs about 130 staff in Darlington.

London-based Morgan Sindall has also agreed to buy Amec's urban regeneration division, Amec Developments, and will pay £26m for the two businesses.

The move puts Morgan Sindall among the five largest construction firms and cements its leading position in the urban regeneration market.

Amec's sale of the businesses come as part of its plans to exit higher-risk construction and built environment markets to focus on oil, gas and nuclear work and project management.

All staff in Amec's DPS division are expected to transfer to Morgan Sindall as part of the deal, although a spokesman said it was too early to say exactly how it would affect employees in Darlington.

Amec will continue to house its larger industrial division in Darlington.

DPS, which has a revenue pipeline of £800m and operates in the UK's health, defence, industrial and transport sectors, employs about 2,800 people in the UK.

It was formed in January last year from the integration of Amec Design and Management and Amec Construction Services

Morgan Sindall yesterday said the acquisition would accelerate its entry into the "attractive, large scheme, mixed-use urban regeneration market" and fit with its existing construction offerings.

Executive chairman John Morgan said: "This acquisition is a significant next step for Morgan Sindall. It substantially adds to our existing divisions and opens up huge growth opportunities in our construction markets.

"Morgan Sindall represents an excellent home for DPS, their employees and customers and we look forward to further developing the business."