Australian mining services companies Ausdrill and Brandrill will merge in a deal that gives Ausdrill an entry into the coal market.

Under the all share deal, Ausdrill will issue its one share for every 14.5 Brandrill share, valuing the deal at A$45.2m, while Brandrill has agreed not to approach or encourage other proposals from other companies.

The merger brings together two established and experienced companies, Ausdrill chairman Terry O’Connor said.

“This is a logical and compelling merger resulting in a stronger combined entity, benefiting both Ausdrill and Brandhill shareholders. The combined group brings together two established and experienced mining services operators, and provides benefits of increased scope and scale,” O’Connor said.

The new entity brings in operational synergies and increases financial strength with a greater capacity to pursue further growth opportunities, Ausdrill said.

Brandrill’s workforce will be integrated into the existing Ausdrill structure and Brandrill director Mason Hills will join its board.

A meeting of Brandhill shareholders will be held in late November 2009 to vote on the merger with final implementation likely to occur in December 2009 if it is approved.