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Balfour Beatty completes sale of Parsons Brinckerhoff for £820m

Deal was major sticking point in merger plan between Carillion and Balfour Beatty which led to talks breaking down

The Midland Metro extension, which is being led by Balfour Beatty

Construction giant Balfour Beatty, the company leading the extension of the Midland Metro in Birmingham city centre, has sold its consultancy arm Parsons Brinckerhoff for £820 million.

The sale was the sticking point in the proposed merger between Balfour and Carillion, the Wolverhampton-based support services firm which built the Library of Birmingham.

Balfour announced in May it was placing Parsons Brinckerhoff on the market and in July Carillion and Balfour revealed they had entered merger discussions.

After several weeks of meetings and public statements, it became clear Carillion was keen to retain Parsons Brinckerhoff in a newly merged group whereas Balfour was determined to proceed with the disposal as planned.

As a consequence, merger talks broke down last month meaning the deal, which would have created a £3 billion giant, never went ahead.

Balfour Beatty, which also buit the Queen Elizabeth Hospital in Selly Oak, announced the sale of Parsons to WSP Global today.

As a result of the deal, it said it planned to return up to £200 million to shareholders and use approximately £85 million to reduce the group's pension fund deficit.

It added that the company would be repositioned as an Anglo-American infrastructure group focused on construction, services and investments.

Balfour acquired Parsons Brinckerhoff in September 2009 for £382 million.

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