Balfour Beatty ends merger talks with Carillion
London, July 31, 2014
British construction company Balfour Beatty said on Thursday it had terminated talks with Carillion over a possible 3 billion pound ($5.08 billion) merger, only days after the possible deal was revealed.
Balfour said in statement that it had ended the talks after Carillion said it would only progress with a merger if its Parsons Brinckerhoff business remained part of the deal.
The company said it would proceed with its own business plan, and would continue to actively progress its search for a group chief executive.
In the statement, Balfour Beatty said Carillion’s board made a “wholly unexpected decision” to only progress with the merger if Parsons Brinckerhoff remained part of the combined entity.
In July, Balfour Beatty said that a “competitive sales process” for Parsons Brinckerhoff was “fully underway.” The company previously announced in May that it was evaluating its options for a possible sale of the business, which Balfour Beatty acquired in 2009.
“This change is contrary to the basis upon which the Balfour Beatty board agreed to engage in preliminary discussions,” Balfour Beatty said, and is unacceptable to its board.
For its part, Carillion said on Thursday that its board was “surprised” by Balfour Beatty’s reaction.
“The board of Carillion yesterday concluded, on the basis of analysis to date, that for the combination to satisfy Carillion’s requirements (as set out in the announcement made last Thursday), it would be essential to retain the stability and dependability of Parsons Brinckerhoff’s earnings,” the company said.