Carillion hits back as merger deal collapses

WOLVERHAMPTON-based construction and support services group Carillion has hit back against Balfour Beatty following its decision to pull out of a proposed £3bn merger deal.

Balfour Beatty said it was backing out of the deal because of Carillion’s insistence that consultancy Parsons Brinckerhoff remain part of the combined business – at odds with Balfour’s Beatty’s intention to sell the business.

In a statement, Carillion’s board said it was surprised at the decision and believed there was still value in the merger.

“The board of Carillion is surprised by Balfour Beatty’s reaction as the work to date has led to increased confidence in the potential to realise very material value for the benefit of both sets of shareholders.

“The board continues to believe in the powerful strategic rationale of a combination and the capability of such a combination to create very significant shareholder value,” it said.

The collapse of the deal impacted both businesses yesterday and both suffered heavy falls on the London Stock Exchange.

In a continuing war of words between the two companies, Carillion said it would give further consideration to its position and would comment further in due course.

“In the meantime, there can be no certainty that any offer will be made by Carillion or as to the terms on which any such offer might be made,” it added.

It said its statement had been made without the consent of Balfour Beatty.