Balfour Beatty has sold its engineering and construction management arm Parsons Brinckerhoff in a US$1.35bn deal with Canadian consultancy firm, WSP Global Inc.
Some £85m will be used to reduce the group’s pension fund deficit.
The deal was one of the main reasons recent merger talks between Balfour Beatty and Carillion fell apart.
For Balfour Beatty, which bought Parsons in 2009 for $626m, the sale represents a healthy profit.
Steve Marshall, executive chairman of Balfour Beatty said: “The Board believes that the sale price of £820 million delivers both a significant return on our original investment and a compelling level of value creation for shareholders - which remains the key focus of the Board.
“The sale of Parsons Brinckerhoff follows the recent revaluation of our investments portfolio, which underlines the potential of this division to create value internally and across the Group. In the US, our core construction business is well positioned in a recovering market.
“In the UK we see the potential for margins to progressively recover to peer group levels. Our services business, meanwhile, is well placed to benefit from the growing investment in infrastructure.
“Together, these elements will provide a strong foundation for an incoming Group chief executive officer to take the company forward.”
George J. Pierson, president and chief executive officer of Parsons Brinckerhoff added: “This tremendously exciting transaction significantly expands opportunities for our employees and services to our clients.
“The compatibility of our respective cultures, each focusing on technical excellence and client service, is strengthened by the complementary technical skills we each offer. I have full confidence that by teaming with WSP, our ability to enrich our communities through projects large and small is greatly enhanced, all to the benefit of our employees, clients, and stakeholders.”
Parsons Brinckerhoff’s 14,000 employees, across five continents, will now transfer to WSP Global.