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Balfour Beatty PLC (BBY)

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Wednesday 20 September, 2000

Balfour Beatty PLC

Acquisition

Balfour Beatty PLC
20 September 2000

BALFOUR BEATTY TO ACQUIRE ADTRANZ RAIL ELECTRIFICATION AND TRACTION POWER
SUPPLY BUSINESS FOR EUROS 153 MILLION (£94 MILLION)
=========================================================================

Key Points
----------


-  A substantial acquisition in a strong growth sector
-  Creates a £600 million per annum worldwide rail infrastructure system
   business for Balfour Beatty
-  Excellent fit in geography and technology
-  A major presence in Germany and other key rail markets
-  Strong order book and worldwide reputation
-  Earnings enhancing
-  Enables Balfour Beatty to access the Group's substantial German tax losses


'This acquisition is another very important step towards our stated objective
of becoming a world leading supplier and maintainer of fixed rail
infrastructure.

'The combination of our very substantial existing rail capabilities and the
fixed equipment operation we are acquiring from Adtranz creates a world scale
rail engineering and electrification business.  The acquired businesses and
those we already own are highly complementary in terms of both geography and
technology.'

Mike Welton
Chief Executive



BALFOUR BEATTY TO ACQUIRE ADTRANZ RAIL ELECTRIFICATION AND TRACTION POWER
SUPPLY BUSINESS FOR EUROS 153 MILLION (£94 MILLION)
=========================================================================


Balfour Beatty, the international engineering, construction and services
group, announces today that it is to acquire the rail electrification and
traction power business of Adtranz - DaimlerChrysler Rail Systems - for a
total consideration of approximately Euros 153 million (£94 million).

The business to be acquired designs, manages, installs and commissions railway
electrification systems and services internationally.  It has leading
positions in Germany, its principal market, Sweden, Spain and Austria.  It
also has a strong presence in Turkey, China, Malaysia, South America, the UK
and other territories, through current project work, and in some cases through
a permanent business presence.

Its principal customers are Deutsche Bahn in Germany, Banverket in Sweden,
Renfe in Spain and OBB in Austria.  It also works extensively for metropolitan
transit and mainline rail  authorities including those in Germany, China and
Turkey.

The business to be acquired had 1999 sales of Euros 290 million and profits
before interest and taxation of Euros 16.25 million.  The business had net
assets of Euros 13.4 million at 31 December 1999, excluding pension
provisions.  Its order book on that date amounted to Euros 467 million.  It
employs approximately 1400 people.

It is anticipated that the acquisition will be earnings enhancing in 2001*.
In addition, the majority of the acquired company's profits arise in Germany
where Balfour Beatty has significant tax losses.  The acquisition will be
financed from Balfour Beatty's existing cash resources.

Balfour Beatty Chief Executive, Mike Welton, commenting today on the
transaction said, 'This acquisition is another very important step towards our
stated objective of becoming a world leading supplier and maintainer of fixed
rail infrastructure.

'The combination of our very substantial existing rail capabilities and the
fixed equipment operations we are acquiring from Adtranz creates a world-scale
rail engineering and electrification business.  The acquired businesses and
those we already own are highly complementary in terms of both geography and
technology.'

Christer Badholm, Executive Vice President of Adtranz Mass Transit business
segment said, 'We are delighted to have found such an appropriate partner for
our rail electrification and traction power business.  I feel confident that
the business can look forward to a stable and profitable future under its new
ownership.

'The transaction will also enhance the multi-disciplinary capabilities of the
fixed installations business and create a strong position to continue to work
in partnership with Adtranz in delivering total rail systems.'

The Adtranz fixed installations business has a strong and well-established
management team and world-recognised technology and expertise.  Balfour
Beatty's traction power and control system capabilities will be substantially
enhanced as a result of the transaction.  In rail electrification, the Adtranz
expertise in aluminium catenary designs, high-speed and third rail technology
will improve Balfour Beatty's position in all of its current markets.  The
acquisition takes the group into many new markets.

As a result of this acquisition, Balfour Beatty's rail business will have a
much wider customer base, to which its full range of rail capabilities will
become available.  These include turnkey solutions for railway electrification
systems, major multi-disciplinary rail projects, construction and upgrading of
rail track, rail asset management and maintenance and switches and crossings
manufacture.

The Group will also achieve an immediate and major presence in the very
substantial domestic German rail market.

It is anticipated that the other Adtranz rail businesses, which, it was
announced recently, are to be acquired by Bombardier, will continue to be a
key working partner.

Investment in the world's rail infrastructure is growing under the influence
of rapid traffic growth, the development of mass transit systems, rail utility
restructuring, increased outsourcing of maintenance and renewals work and the
increased involvement of the private sector.

Completion of the transaction is subject to the approval of the
DaimlerChrysler Supervisory Board and the German competition authorities. It
is anticipated that the transaction will be completed by the end of October.

The final consideration will be Euros 153 million plus or minus the value of
the net assets of the business, which, at completion, are currently expected
to be approximately zero, including pension provisions.  The acquisition will
be financed from Balfour Beatty's existing cash resources.

* This statement should not be construed as a profit forecast or be
interpreted to mean that the future earnings per share of Balfour Beatty will
necessarily match or exceed earnings per share for completed financial
periods.

Enquiries to:
Tim Sharp
Tel: 020 7216 6884

Notes to Editors
----------------


1.  Balfour Beatty's rail engineering and services business had 1999 sales of
Euros 533 million (£351 million) and operating profits of Euros 27 million
(£18 million).

2.  In March 2000, Balfour Beatty acquired the US trackwork specialists, Marta
Track Constructors Inc. and Metroplex Corporation for an initial consideration
of $50 million.  This provides the group with a substantial presence in the
large and growing US rail market.

3.  The fixed equipment business of Adtranz is working on a wide range of rail
projects around the world including the Euros 100 million Harbin-Dalian Line
in China, the Euros 90 million Nurnberg to Ingolstadt Line in Germany, the
Euros 40 million Madrid to Barcelona high-speed line in Spain, a Euros 22
million project in Sao Paulo in Brazil and a Euros 20 million project on the
Sunderland Metro in the UK.

4.  Balfour Beatty Rail in the UK has recently been selected by Railtrack as
preferred bidder for £600 million of rail maintenance contracts over the next
five years.  It is the UK market leader in rail maintenance.

5.  Balfour Beatty Rail is currently working on a number of major UK rail
projects including the remodelling of the infrastructure on the approaches to
Euston Station, the electrification of the West Coast Main Line, the
remodelling of the approaches to Leeds station and a key contract on the
Channel Tunnel Rail Link.

6.  The company's activities in the USA include major projects, in their early
stages, for the BART San Francisco Airport Extension, the Alameda Corridor
project in Los Angeles and the Southern New Jersey Light Rail System.  The
Group is in the process of completing the $500 million high-speed rail
electrification of the line from Boston to New Haven in the USA for Amtrak.