Balfour Beatty and Carillion in merger talks

Balfour Beatty and Carillion, two of the UK’s largest contractors are in merger talks that could create a UK£12 billion (€16 billion) per year company. A contractor of that size would be by far the biggest in the UK, the fifth biggest in Europe and around the 15^th biggest in the world.

A statement to the London Stock Exchange confirmed that the two companies were in merger talks, but added that there was no certainty that a transaction would follow.

However, the statement went on to say, “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.”

It was also confirmed that Balfour Beatty’s previously announced intention to divest Parsons Brinckerhoff would not be affected by any merger talks or plans.

Balfour Beatty is the UK’s largest contractor. It was ranked no.9 in the CE-100 ranking of Europe’s largest construction contractors, published in the July-August issue of Construction Europe and no. 26 in sister magazine International Construction’s (iC’s) ranking of the world’s top 200 construction companies.

Carillion is the UK’s fourth largest contractor, behind Balfour Beatty, Laing O’Rourke and oil & gas specialist Petrofac. It was no.25 in this year’s CE-100 and no.70 in the iC Top 200.