A confirmation of merger talks between Balfour Beatty and Carillion emerged on Sky News after markets had closed last night. This merger would could create a £3bn blue-chip construction giant.
These companies have acted on major projects such as the London Olympics Aquatics Centre and the St Pancras Channel Tunnel. Both firms have recently faced controversy over deals awarded to them by the last Labour Government. Balfour alone profited to the tune of £188.9m from the rising value of its private finance initiatives (PFIs) and public private partnerships (PPPs).
Balfour has since issued its second profit warning in two months after facing problems with its engineering division. In a joint statement the parties said that they “hope to create a market leading services, investments, and construction business of considerable depth and scale.”
If the merger went ahead, it could create substantial job losses and have serious implications on competition in the market. The parties should be prepared for the deal to be monitored by the Competition Commission, especially as they both carry out significant public sector work.
Under City rules, the companies will now have until 21 August to announce a deal, although this could be extended
Read more about this in the Independent here.