Security company G4S has agreed to buy its Danish rival ISS in a deal worth £5.2bn, to create the world’s biggest security and facilities services group.

G4S  has today agreed to pay £1.53bn to ISS,  a privately owned company, and take on  3.76 billion pounds worth of ISS debt. The deal has been agreed and the terms will mean that payment will be made half in cash and half in share options.

G4S shares slumped on the news as they announced that it intended to raise 1.88 billion through a rights issue in order to fund the deal.

The belief is the acquisition will transform G4S’s business model and accelerate the delivery of G4S solutions strategy. This will give considerable value to shareholders.

The takeover will create a business with combined revenue of £15.9bn. Making G4S the largest security company in the world.

It will also provide large growth opportunities but as well as this it will deliver £100m of pretax cost savings year on year by 2014.

G4S has justified the deal by saying that it  expects the deal to deliver “double-digit” earnings-per-share accretion within three years.