Balfour Beatty Regulatory News (BBY)

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

31 October 2014

Balfour Beatty COMPLETES disposal of Parsons Brinckerhoff

International infrastructure group Balfour Beatty today announces that it has completed the sale of Parsons Brinckerhoff to WSP Global Inc. The net cash consideration of US$1,242 million (£753 million) represents a multiple of 11 times underlying EBITDA for the year ended 31 December 2013.

The cash proceeds are intended to be used, after deductions for transaction taxes, fees and other transactional costs of approximately £50 million, together with certain separation-related costs of £30 million, as follows:

· up to £200 million to be returned to shareholders through a share buyback programme to start following the announcement of the Group's 2014 preliminary results, subject to the Board's assessment of the trading environment at the time

· £85 million to be used to reduce the Group's pension fund deficit; and

· the balance to be retained by the Group to ensure a strong balance sheet and provide increased financial flexibility.

Following the disposal of Parsons Brinckerhoff, Balfour Beatty will be an £8 billion turnover business comprising:

· top tier construction businesses in the UK and US, operating across the infrastructure and building sectors

· a leading investments business, with a full range of finance, development, ownership and asset management capabilities

· a services division with a number of specialist construction and asset management businesses which naturally complement and enhance the Group's other activities and

· construction joint ventures in the Far East and Middle East.

Executive Chairman Steve Marshall said: "This sale represents a significant return on Balfour Beatty's investment and a compelling level of value creation for shareholders. Following the sale, Balfour Beatty will be a simplified and more focused Group. It has leading positions in the UK and US construction and infrastructure markets, all supported by a strong balance sheet. Leo Quinn joins as Group Chief Executive in the New Year to take the Group forward and to drive shareholder value."

ENDS

About Balfour Beatty

Balfour Beatty (www.balfourbeatty.com) is an international infrastructure group that delivers world class services essential to the development, creation and care of infrastructure assets; from finance and development, through design and project management to construction and maintenance. Our businesses draw on more than 100 years of experience to deliver the highest levels of quality, safety and technical expertise to our clients principally in the UK and the USA, with developing businesses in Australia, Canada, the Middle East and South East Asia. With proven expertise in delivering infrastructure critical to support communities and society today and in the future, our key market sectors focus on infrastructure - transportation (roads, rail and aviation), power and energy, water, and complex buildings (both commercial and social). Balfour Beatty employs 40,000 people around the world.

Consideration

The net cash consideration of US$1,242 million (£753 million) is in line with the expected net proceeds announced at the time of the sale, on 3 September 2014.

As part of the finalisation process, adjustments were made to the purchase price to reflect changes to the estimated cash balance retained within Parsons Brinckerhoff, against those agreed at the time of the sale agreement. The estimated cash balance of US$85 million (£52 million) retained within Parsons Brinckerhoff at sale is $25 million (£15 million) lower than the reference level in the sale and purchase agreement. As a result, the consideration price has been adjusted by the $25 million to $1,327 million (£805 million). These amounts remain subject to modest post-closing adjustments for working capital.

An exchange rate of $1.65:£1.00 has been used, consistent with the prevailing exchange rate at the time of sale, as announced on 3 September.