Carillion and Balfour Beatty's £3m merger collapses
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Version 0 of 1. 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. |