Balfour Beatty ends Carillion merger talks

Decision blamed on Carillion's insistence that Balfour's Parsons Brinckerhoff business was included in the deal

Balfour Beatty has pulled the plug on a potential merger with rival Carillion.

The withdrawal was blamed on Carillion's "wholly unexpected decision" to insist that Balfour's US business Parsons Brinckerhoff was included in the deal.

The two sides had previously agreed to start merger discussions on the basis that Balfour continues with previously announced plans for the sale of Parsons, a business it bought for £380 million in 2009.

Balfour said: "This change in the proposed terms is not acceptable to the board of Balfour Beatty.

"Balfour Beatty will proceed in accordance with its own business plan, including the competitive sale process of Parsons Brinckerhoff currently well under way." 

The discussions, which were disclosed last week, followed an initial approach from Carillion with Balfour struggling after a series of profits warnings and the departure of chief executive Andrew McNaughton.

Balfour 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.