The main contracting model has been under fire for some time now – so creating a new Goliath may not be the smartest of moves.

Major clients are funding projects much more efficiently now – reducing the amount of cash in the building process as the balance sheets of Tier One contractors’ reveal.

At the same time the traditional model of holding onto suppliers’ money for as long as possible is under attack from late payment legislation.

Cash flow is the life blood of construction’s biggest players.

Having to pay the bills on time makes the books of major contractors a less happy read for accountants.

Balfour Beatty is also still lumbered with a slew of problem contracts bid at below cost during the dark days of the recession.

Wafer-thin margins and quicker payment times for suppliers are not a happy mix for major contractors.

A fact Carillion is acutely aware of hence its scaling-down of UK construction operations over the last four years.

Of course both firms are global players with construction just part of a range of specialities including support services, PFI investments and infrastructure.

Merging the other parts of the business to create a worldwide giant would make sense in a global marketplace.

But welding together the two UK construction divisions could create more problems than it solves.

It would also prompt huge job losses as a combined business cuts roles to enjoy economies of scale.

A cursory glance at both firms’ network of offices reveals glaring overlaps with widespread redundancies sure to follow any deal.

The City reacted positively last week when the news first broke.

But those early gains soon slipped back and the share prices showed slight dips yesterday.

Carillion and Balfour to merge certainly made a great headline.

Now time will tell if the rest of the story has a happy ending.