Hopes of a £3bn merger between construction groups Carillion and Balfour Beatty looked set to be dashed last night after Balfour agreed a sale of its US business.
Carillion had, early on in the long-running negotiations, declared the American arm, known as Parsons Brinckerhoff, would be retained. But Canada’s WSP Global agreed to pay $1.35bn (£820m) to buy it.
Balfour had, throughout the talks, been keen to sell the US arm at what it saw as a favourable valuation at the best time in the economic cycle, but Carillion wanted to keep the lucrative American cashflows through the merger.
Shareholders will receive a £200m share of the proceeds from the sale, with £85m going on shoring up Balfour’s pension scheme and the rest to strengthening its financial reserves.
Reports had said construction services group Atkins and a number of private equity firms were also in the running to buy the company, but WSP edged ahead in the middle of last month.
Balfour Beatty has issued a string of profit warnings which claimed its chief executive’s scalp earlier this year.
Executive chairman Steve Marshall said the deal would “provide a strong foundation for an incoming group CEO to take the company forward.”
WSP was a London Stock Exchange-listed UK engineer until two years ago when it was bought by Canadian rival Genivar. The combined company went back to the WSP name last year.