Carillion in shock merger talks with Balfour Beatty

Grant Prior 8 years ago
Share

Carillion has launched a merger bid with Balfour Beatty.

The move could result in massive job losses across the UK as the merger creates a streamlined super-contractor.

The share prices of both firms rose by more than 10% in early trading as the City reacted positively to the move which would create a company worth over £3bn.

A statement on the talks said: “The Boards of Carillion and Balfour Beatty can confirm that, following an approach from Carillion to Balfour Beatty, they are engaged in preliminary discussions in relation to a possible merger of Carillion and Balfour Beatty.

“The Boards of Carillion and Balfour Beatty believe that the merger of the two groups has the potential to create a market leading services, investments, and construction business of considerable depth and scale.

“Work is now underway to develop a strategy and outline business plan for a combined entity, underpinned by the evaluation of achievable synergies, future financing arrangements and a number of other essential supporting workstreams.

“In evaluating the merits of the merger, the two boards will, inter alia, wish to be satisfied that such a merger would lead to very significant value creation for the benefit of both sets of shareholders.

“The two parties have agreed that Balfour Beatty’s publicly announced sale process for Parsons Brinckerhoff, which is already underway, will proceed unaffected by this announcement, subject to achieving acceptable value and terms.”

The move by Carillion is believed to be opportunistic following a string of profit warnings by Balfour Beatty.

Carillion has been slimming-down its construction division since 2010 but is looking to increase activity now the market is picking-up.

The companies have until 21 August to announce either a firm intention to merge or state that no deal would take place.

Balfour Beatty had a turnover of £10.1bn in 2013 compared to Carillion’s revenue of £4.1bn.

Carillion has had an acquisitive strategy since it was formed in 1999 following a demerger from Tarmac after buying Wimpey.

Carillion bought Mowlem  in 2006, Alfred McAlpine in 2008, Vanbots in 2008 and Eaga in 2011.

Latest news

Greswolde Construction goes under

Solihull contractors ceases trading with 24 jobs lost
17 hours ago

Designs revealed for £1bn London Blackfriars tower blocks

Fosters design landmark green office skyscraper and two blocks of flats for Southwark site
1 day ago

Everton stadium job still on budget despite inflation

Club and Laing O'Rourke confident they can still build new ground for £500m
1 day ago

Construction output falls 1.4% halting 7-month growth spurt

Fresh output and orders figures confirm summer construction slowdown
1 day ago

McLaren gets green light for £85m build-to-rent scheme

Construction set to start this autumn on major city centre development
1 day ago

BAM limbers up for £25m Bedworth leisure centre

Pioneering Warwickshire health and fitness hub to start this autumn
1 day ago

Keepmoat to start four-year build in Wigan

Major regeneration scheme to start across four sites
1 day ago

Solihull contractor Greswolde heading for administration

New investors took over business 12 months ago
2 days ago

Duo win £500m canal and river main works deal

Kier and Bentley bag Canal & Rivers Trust's largest ever water engineering works deal
3 days ago

Construction Manager of the Year finalists revealed

70 of the industry's brightest talents: Full list
2 days ago

Willmott Dixon fills new strategic change director role

Vistry Group change director joins private builder to support future growth
2 days ago

Work starts on £42m Oldham Spindles overhaul

Willmott Dixon signs off £42m deal to create new market, offices and event space
2 days ago

Firms wanted for Telford & Wrekin £1.6bn building works DPS

Call up for dynamic purchasing system covering building and refurbishment work
2 days ago

Kier pulls off contracts league double in July

Contractor bags highest value of new work and tops rolling 12 months ranking
3 days ago

Hinkley Point C giant water intakes craned onto seabed

Video: contractors complete one of the world’s most complex marine engineering projects
3 days ago

Taziker revenue jumps 30% to record £73m

Multi-disciplinary engineering specialist boosts headcount to 366 staff
3 days ago

Consultant buys scaffolding contractor

RSK Group makes MG Scaffolding its latest acquisition
3 days ago

M&E specialist gears up for £16m Aston Martin package

Major package award on McLaren Silverstone site
3 days ago

Plans in for Brentford 110-flat canalside scheme

Makers’ Yard mixed commercial and residential use scheme
3 days ago

WSP to buy consultant RPS Group for £591m

5,000 staff at Oxfordshire based firm to join WSP
4 days ago

Countryside puts offsite factory up for sale

Offers invited for Bardon plant which is less than a year old
4 days ago

M&E specialist Spie UK arm returns to profit

French parent group launches a strategic review of UK operations after performance stabilises
4 days ago

Site boss fined for locking out safety inspectors

Police called to enter site before fire fighters rescue workers stranded on roof
4 days ago

Rebid starts for £200m M5 junction job

Cost inflation forces retender for £200m junction 10 rebuild near Cheltenham
4 days ago

New Downing Construction boss named

Andy Thomas takes top job as Ian Orton steps back after 24 years
4 days ago

Plans in for 600 homes at London Aylesbury estate

Notting Hill Genesis aims to start work next year on phase 2 of Southwark estate rebuild
4 days ago

Tide gets green light for UK’s tallest modular tower

Volumetric specialist to build 48-storey student skyscraper at Canary Wharf
6 days ago

TopHat cuts losses and aims for profit in three years

Modular specialist investing for future as latest results show £19.4m loss
5 days ago

Story Contracting names next chief executive

Andy Joy to be promoted to CEO as Jason Butterwork becomes vice chairman
5 days ago

Stalled £100m North London build-to-rent tower to start

Essential Living commits to start Swiss Cottage scheme six years after planning OK'd
6 days ago

Contractor services