24th Jul 2014 17:33
LONDON (Alliance News) - Balfour Beatty PLC and Carillion PLC are in talks over the creation of a construction services powerhouse via a GBP3 billion merger, according to Sky News on Thursday, citing people familiar with the matter.
A merger of the two FTSE 250 British construction firms, which have flagship projects like London's Olympics Aquatics Centre and the redevelopment of Liverpool's Anfield football stadium, would put them on track to enter into the FTSE 100 index as a joint entity.
"This would create a national leader and a world-class support services company," one person familiar with the talks told Sky News.
Balfour, which has a market capitalisation of GBP1.6 billion, has seen its shares perform poorly recently after sacking its Chief Executive Andrew McNaughton in May after just over a year in control.
On the other hand, Carillion, which is valued at GBP1.45 billion, has seen shares increase by more than 13% during the last year.
Balfours shares closed down 1.1% at 232.1 pence and Carillion shares closed up 0.7% at 338.7 pence on Thursday.
Sky News said that, although it is unclear how far advanced the talks are and whether it will go ahead at all, Carillion's Chief Executive Richard Howson is likely to run the merged entity.
The news comes after Balfour announced a profit warning earlier this month due to worse performance at its construction business but it said at the time it was continuing to explore the possibility of selling its US-based consulting and engineering group Parsons Brinckerhoff, which it bought for USD600 million in 2009.
Carillion has had a better period, winning the Anfield redevelopment project earlier in July and holding a total order book of GBP18.5 billion at the time.
http://news.sky.com/story/1306953/balfour-and-carillion-in-3bn-merger-talks
By Tom McIvor; [email protected]; @TomMcIvor1
Copyright 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
Balfour BeattyCarillion Plc