G4S Plc agreed to a 3.8 billion-pound (US$5.1 billion) takeover bid from Allied Universal Security Services LLC, a deal that would combine two of the world’s largest security firms.

Allied raised its offer to 245 pence per share, trumping a hostile proposal from Canadian rival Garda World Security Corp., G4S said Tuesday. The British firm’s directors plan to unanimously recommend the deal to shareholders, according to the statement, which confirmed an earlier Bloomberg News report.

The offer beat Garda’s latest proposal of 235 pence per share and represents a 68 per cent premium to G4S’s last close before first announcing a takeover approach in September. Allied has committed financing and signed a preliminary agreement for future funding of G4S’s pension scheme, according to the statement.

G4S is finally agreeing to a deal after months of batting back overtures from its largest competitors. Combining with Allied would create a company with about US$18 billion of annual revenue and a global workforce of more than 750,000, guarding everything from chemical plants to public transport and sporting events.

G4S shares rose 0.2 per cent to 255.90 pence as of 8:23 a.m. in London on Wednesday, having gained 3.2 per cent the previous day. Garda last raised its offer a week ago, and still has the option of another bid.

Allied’s shareholders include Canadian pension fund Caisse de Depot et Placement du Quebec and Warburg Pincus. It’s been seeking to woo G4S’s board and only wanted to proceed with a firm offer if it could win their recommendation, Bloomberg News has reported. Garda, which is backed by buyout firm BC Partners, has repeatedly criticized G4S management as it pushed its hostile bid.

Citigroup Inc. and JPMorgan Chase & Co. are lead financial advisers to G4S. Goldman Sachs Group Inc. and Lazard Ltd. also have roles with the British firm. Morgan Stanley is lead financial adviser to Allied, which is also working with Credit Suisse Group AG and Moelis & Co.

--With assistance from Ruth David