Building firms planning £3bn merger

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TWO OF the UK’s biggest construction firms – Balfour Beatty and Carillion – have disclosed they are in talks over a potential £3bn merger.

The discussions, which follow an initial approach from Carillion, come with Balfour struggling after a series of profits warnings and the recent departure of chief executive Andrew McNaughton.

The two sides said the combination has the potential to create a support services and construction business of “considerable depth and scale”.

Carillion has a market value of £1.45bn, while Balfour is now worth around £1.6bn after a sharp fall in its share price since March.

Balfour, which was founded in London by George Balfour and Andrew Beatty in 1909, built the aquatics centre at the London 2012 Olympics site and in 2011 completed the painting of the Forth Bridge rail crossing.

It has been rocked by project delays and contract disputes at its Cheadle-based engineering services business, which has been the source of the recent profit downgrades.