Balfour Beatty pulls plug on merger talks
31 July 2014
The UK’s largest contractor, Balfour Beatty, has called off talks with Carillion regarding a possible merger, citing the problem as being Carillion’s “wholly unexpected decision” to go ahead with the possible merger only if Parsons Brinckerhoff remained part of the potential combined entity.
Balfour Beatty said this was contrary to the basis on which its board agreed to engage in preliminary discussions. It said it was contrary to a joint announcement last week, which Balfour Beatty said confirmed that the sale of Parsons Brinckerhoff would be unaffected by the merger discussions. It also pointed to a presentation by Carillion to Balfour Beatty’s board on 28 July.
Balfour Beatty, ranked 9th in the CE-100 list of European contractors, said this change in the proposed terms was not acceptable to its board.
In May, Balfour Beatty’s CEO, Andrew McNaughton, stepped down, and it was announced that the company was considering selling Parsons Brinckerhoff, the US$2 million (€1.5 million) a year US engineering company it bought in 2009.
Balfour Beatty said it would now proceed in accordance with its own business plan, including the “competitive sale process of Parsons Brinckerhoff”, which it added was currently well underway. It will also continue actively to progress its search for a group CEO.
A merger of Balfour Beatty and Carillion – No 25 in the latest CE-100 – would have produced a contractor with revenues of about €16 billion a year and would have been by far the biggest in the UK, the fifth biggest in Europe and around the 15th biggest in the world.
