Balfour Beatty bids £32 million for civil engineering firm
Building contractor Balfour Beatty has announced that it has made a £32 million cash offer for civil engineering firm, the Birse Group.
In a statement, the construction and engineering company said that the bid represented an offer of 16.625 pence per Birse share.
Balfour Beatty said that the deal would "create a powerful force in UK civil engineering with a broad and strong regional presence and a high-quality customer base".
The company said that the merger would strengthen its capabilities in coastal and rail-related civil engineering work and add to its engineering and project management skills in water and other process sectors.
Balfour Beatty stressed that the deal would enhance value for its shareholders and would boost the company's earnings by 2007.
It added that company's financial strength would allow Birse to speed the development of its business following a difficult period in which the Lincolnshire-based firm has seen a narrowing of its capital base and relatively high levels of gearing.
Welcoming the proposed deal, Balfour Beatty chief executive Ian Tyler said: "The acquisition of Birse is a substantial step in delivering Balfour Beatty's stated strategy of expanding and strengthening its regional presence in the UK civil engineering and building sectors."
"We are confident that by bringing the two businesses together, we can accelerate growth and significantly improve performance."
Birse chairman Peter Watson said the merger would support "positive momentum" behind both businesses and provide value for Birse shareholders.
"With opportunities on the increase in our main infrastructure markets the benefit of the stronger covenant offered by Balfour Beatty will enable our businesses to take a leading position in meeting that demand and enhance their service proposition to customers," said Mr Watson.