Balfour Beatty and Carillion Plc, two of Britain's biggest construction companies, confirmed on Thursday that they were in preliminary talks on a possible merger.
In a statement sent to Reuters, Balfour Beatty and Carillion said a merger has the potential to create a company with market leading services, investments, and construction business of considerable depth and scale.
Sky News first reported late on Thursday that the companies were in detailed discussions for a 3 billion pound ($5.09 billion) merger. (bit.ly/1pg4g86)
The news service said the deal could take until September to be formally announced.
In their statement, the construction firms said no final decision has been reached regarding the structure of any merger. They also expressed agreement that Balfour Beatty's publicly announced sale of engineering and design firm Parsons Brinckerhoff would be unaffected by the talks.
($1 = 0.5889 British Pounds)
(Reporting by Aashika Jain in Bangalore; Editing by David Gregorio and Paul Simao)