Aug 14 (Reuters) - Thousands of British construction jobs could be lost if Balfour Beatty Plc was to accept Carillion Plc’s proposed merger offer to create a 3 billion pound ($5 billion) giant, the Times reported on Thursday, citing sources.
Balfour's Executive Chairman Steve Marshall and Carillion CEO Richard Howson had a fundamental falling out over the future size and shape of Balfour's UK construction arm, the daily said, without plainly stating who its sources were. (thetim.es/1BhHndv)
The two companies revealed in July they were in talks, but Balfour walked away only days later after Carillion insisted it cancel the planned sale of its U.S. engineering and design business Parsons Brinckerhoff.
Carillion earlier on Thursday said it had told Balfour’s investors that a merger would deliver 175 million pounds in cost savings a year, and if the deal was sealed it would overhaul the rival firms’ British construction business.
Balfour responded by saying it had “serious reservations” about whether the synergies could be achieved and warned that the substantial rescaling of its UK construction business could cause the firms to incur costs running into “many hundreds of millions of pounds”.
Thousands of jobs could be lost if Balfour’s construction arm was to be significantly downsized, sources told the Times. The business employs about 9,000 people, the daily said.
A spokesman for Carillion declined to comment. Balfour could not immediately be reached outside of regular business hours in the UK. ($1 = 0.5994 British Pounds) (Reporting by Esha Vaish in Bangalore)