Carillion and Balfour revive merger talks
CARILLION and Balfour Beatty have resumed talks over a possible £3bn merger, which would create one of the UK’s largest construction firms.
Negotiations broke down at the end of last month due to a dispute over Balfour’s planned sale of Parsons Brinckerhoff, a US engineering design business it bought in 2009.
Carillion said it would only continue with the merger if PB remained part of the combined business, saying “it would be essential to retain the stability and dependability of Parsons Brinckerhoff’s earnings.”
Balfour called Carillion’s decision “wholly unexpected” and contrary to the initial merger talks. But Morning Wire understands the two sides were back in touch last week. The easing of tensions was first reported in the Sunday Times, citing sources close to the deal. It is understood that Carillion has fine-tuned its offer in a bid to seal the deal, according to the sources.
Under takeover rules, the companies have until 21 August to announce a firm intention to merge or shelve plans for a deal.
Usually after a merger the top roles are divided, but Carillion’s chairman Philip Green and chief executive Richard Howson are expected to take up the same roles at the combined company if the deal goes through.
While Balfour is the bigger of the two firms, it has had a turbulent couple of years, during which time it issued four profit warnings and saw its chief executive Andrew McNaughton depart in May.
Carillion and Balfour Beatty declined to comment.