Carillion and Balfour in talks over possible merger

25th Jul 2014 11:42

FTSE 250 engineering groups Carillion and Balfour Beatty on Friday confirmed rumours they are in discussions about a possible merger. The preliminary talks are to develop a strategy and outline a business plan for a combined entity, which it said would be "underpinned by the evaluation of achievable synergies, future financing arrangements and a number of other essential supporting workstreams". Any tie-up between the two would need to lead to "very significant value creation" for both sets of shareholders, they said. "The boards of Carillion and Balfour Beatty believe that the merger of the two groups has the potential to create a market leading services, investments, and construction business of considerable depth and scale," a joint statement from the two group read. Shares in Carillion jumped 9.72% to 371.40p in morning trade, while Balfour Beatty leapt 8.37% to 251.52p. NR