Troubled architect SMC is in talks to merge with fellow listed practice Aukett Fitzroy Robinson.

The companies said in a statement that they had entered into a non-binding agreement over a proposed merger. A deal would create a group with 890 staff in 38 offices, spanning nine countries.

The talks come amid a turbulent period at SMC. Stewart McColl, the founder and former chief executive, left earlier this year after a review into the firm’s underperformance.

The company’s profit dropped 4% to £2.7m last year and it has since posted further profit warnings. The share price has plummeted almost 90% in the past eight months to 22p.

It is not the first time the only two quoted architects in the UK have held talks. In 2005, SMC made an approach for Aukett, which later merged with Fitzroy Robinson.

Stirling prize nominated architects Haworth Tompkins and Glen Howells have made it on to a list of designers set to work on the £2bn Olympic Village. They are joined by up and coming practices 6a Architects, Amin Taha and Surface as well as established firms such as Caruso St John and Feilden Clegg Bradley. For the full list of practices log on to www.building.co.uk/breakingnews.