CARILLION and Balfour Beatty have confirmed they are engaged in preliminary discussions about a possible merger.
The move follows an approach from Carillion to Balfour Beatty and both boards believe a merger of the two groups has the potential to create a market leading services, investments, and construction business of considerable depth and scale.
Work is now underway to develop a strategy and outline business plan for a combined entity.
The two parties have agreed that Balfour Beatty’s publicly announced sale process for Parsons Brinckerhoff, which is already underway, will proceed unaffected by this announcement, subject to achieving acceptable value and terms.
The Boards of Carillion and Balfour Beatty have said they will only proceed with a merger if both firms were to conclude due diligence to their satisfaction, and both boards were to recommend it to their shareholders.
No final decision has been reached regarding the structure of any merger. Accordingly until further notice, for the purposes of the Code, both Balfour Beatty and Carillion will be treated as offeree companies.
Both Carillion and Balfour Beatty are required, by not later than 5pm on 21 August 2014, to either announce a firm intention to undertake a transaction or announce that they do not intend to undertake a transaction.