Two of the UK’s leading construction companies Balfour Beatty and Carillion are in talks to merge in a move that would create a £3bn construction giant.

The companies last night said they have been in talks for the last few weeks in a deal that would almost certainly be scrutinised by the Competition Commission.


Balfour Beatty’s former CEO, Andrew McNaughton left the company in May following a profit warning, whilst they reported profits of almost £190m there has been a concern the company is rudderless and it’s anticipated that Carillion’s Chief Exec Richard Howson would run the new company which could come into being as early as the end of summer and which would rank on the FTSE 100.


Balfour Beatty had a turnover of £10.1bn in 2013 compared to Carillion’s revenue of £4.1bn however Balfour Beatty made losses of around £60m in the UK in 2013 owing to competition over government contracts which saw its profit margins squeezed whereas Carillion has done a lot better in recent times winning a number of lucrative contracts.

Under City rules, now the companies have confirmed they’re in talks they have until the 21st August to make an announcement about any deal (although that deadline could be extended).


Although the details of any deal haven’t yet been announced, let's hope that there won’t be significant job losses as the company becomes streamlined.