In a joint statement issued on July 24, the two companies confirmed that preliminary discussions have started and that work is underway to develop a strategy and outline business plan for a combined entity. However no final decision has been reached on the structure of any merger.
The two parties have agreed that the Balfour Beatty's previously announced sale of Parsons Brinckerhoff, which is already underway, will not be affected.
Balfour Beatty's rail infrastructure business operates in more than 20 countries with activities including major projects, electrification, signalling, track systems and components, and maintenance services.
Carillion is active in the British rail infrastructure sector with business units covering infrastructure services, construction services and facilities management. The company was recently awarded a five-year track renewals contract worth around £100m by Network Rail, and is also a framework supplier for Network Rail's electrification programme in a 70:30 joint venture with Austria's Powerlines Group.