Carillion and Balfour Beatty's £3m merger collapses
Shareholders will receive a £200m share of the proceeds from the sale
Jim Armitage is the City editor of The Independent and London Evening Standard group of newspapers. He has been a reporter and editor for more than 20 years and was recently shortlisted for the Press Gazette financial journalist of the year and The Society of Editors financial journalist of the year awards. He contributes news, investigative reports and comment to the Independent titles plus a daily column in the Evening Standard.
Deputy business editor
Wednesday 03 September 2014
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.
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