Disposal

Carillion PLC
16 May 2001

Disposal of Carillion Housing

Carillion plc and Morgan Sindall plc have signed heads of terms for the sale
of the business and assets of Carillion Housing to Lovell, a subsidiary of
Morgan Sindall plc, thereby creating the UK's largest affordable housing
company.

The two businesses have complementary skillsets:

Carillion Housing

Refurbishment (residents in occupation)

Strong Scottish base

Relationships with local authorities

Urban regeneration

Lovell

New Build

Major player in London

Relationships with housing associations

Urban regeneration

Mixed tenure development with new homes

Carillion will continue to pursue Private Finance projects in the social
housing market. However, for PFI construction work in this sector, Carillion
and Morgan Sindall intend to develop partnership arrangements.

The sale of its Housing operations reflects Carillon's strategy of adopting a
more focused and selective approach to construction, of developing its PFI and
services-related businesses and of marketing integrated solutions that combine
its skills in both services and construction.

Roger Robinson, Carillion's Operations Director, says, 'This is another step
in delivering our strategy of being more selective in construction, focusing
our skills and resources on projects where we can achieve better margins,
while enhancing our ability to offer PFI solutions in the social housing
market'.

Carillion Housing's activities include the construction, refurbishment and
repair of social housing and accommodation for Local Authorities, Housing
Associations and Government Departments. When details of the sale are
finalised, the scale of the business to be sold would represent less than five
per cent of Carillion's total turnover in 2000 of £1.9 billion.

For further information

John Denning - Corporate Affairs & Communications

01902 316426

John Davies 01902 316444