Acquisition

Kier Group PLC
15 April 2002



15 April 2002


                        KIER GROUP and BANK OF SCOTLAND

                  FORM £91.6M JOINT VENTURE COMPANY TO ACQUIRE

                          LAING PROPERTY DEVELOPMENTS



Kier Group plc ("Kier") and the Bank of Scotland have each invested £16.0m in
loan stock and contributed 50% of the equity to form a new joint venture
company, Kier Developments Limited ("Kier Developments"). The company has been
formed to acquire the shares in Laing Property Developments Limited ("Laing
Property Developments") and three additional properties held by Laing, together
with the Bank of Scotland's interest in a 50/50 joint venture, Absolute Property
Limited (the "Absolute joint venture") between Laing Property Developments and
the Bank of Scotland. The transaction will significantly enhance Kier's property
interests.

The acquisitions have been financed with £32.0m of loan stock and a notional sum
of £2,000 of equity together with bank facilities of £76.3m provided by the Bank
of Scotland, of which £59.6m has been drawn, providing total funds of £91.6m.
The financing is non-recourse to Kier.

The funds of £91.6m have been applied as follows:


  • £40.0m to acquire the shares in Laing Property Developments and to settle
    the


        inter-company debt between Laing Property Developments and John Laing
        plc group. Of the £40.0m, £33.7m has been paid on completion, £1.9m has
        been deferred and £4.4m is conditional upon statutory consents relating
        to property developments;


  • £9.5m to repay the Bank of Scotland for its loan notes and 50% interest in
    the Absolute joint venture (of which the remaining 50% is already held by
    Laing Property Developments)

  • £43.7m to repay the debt existing within the Absolute joint venture; and

  • the balance represents working capital.

Following the transactions, Kier and the Bank of Scotland will each hold a 50%
investment in Kier Developments with property and other assets and liabilities
valued at £91.6m and debt of £59.6m.

Kier Chairman and Chief Executive, Colin Busby, said:


        "Our 50% investment in Kier Developments, the joint venture which has
        acquired Laing Property Developments, provides us with an exciting
        opportunity to expand our development property business. Our strategy
        for some time has been to make such property acquisitions and a
        portfolio of this quality does not come to the market very often. I am
        looking forward very much to working with our partner, the Bank of
        Scotland, in this new venture."





Bank of Scotland's Managing Director of Corporate Banking, Peter Cummings, said:


        "The combined Absolute and Laing Property Developments business is a
        high quality property portfolio which we look forward to developing
        alongside Kier in this exciting new joint venture."



Reasons for the transaction

Laing Property Developments has a successful track record in commercial property
development, further enhanced through the creation of the Absolute joint venture
with the Bank of Scotland. The business comprises a good quality, well located,
development property portfolio containing 23 properties at various stages of
development.



Laing Property Developments focuses primarily on office and industrial property
development throughout the southern half of the UK. Major office schemes either
under or pending development include projects in Bristol, Camberley and Reading.
Current and potential industrial developments include projects in Exeter,
Bristol, Enfield and Hounslow. The Company is also the selected developer for a
major town centre retail scheme in Enfield. With projects such as these, at
various stages of development, the portfolio provides a balanced expenditure
profile and an attractive supply pipeline for future growth.

Laing Property Developments manages its exposure by securing, wherever possible,
income generating assets and a mix of financing through joint ventures,
pre-sales, and pre-letting. Historically, around 70% of projects have been
pre-let and/or pre-funded prior to completion.

In the year to 31 December 2001 Laing Property Developments, together with the
Bank of Scotland's share of the Absolute joint venture, made an aggregated
profit before interest, exceptional items and tax of £6.2m.

Kier's investment is non-dilutive in the short term and is expected to be
earnings enhancing within two years.

                                    - ENDS -

For further information, please contact:

Colin Busby, Chairman

Kier Group plc

Tel: [phone]



Caroline Sturdy, Associate Director

Bell Pottinger Financial

Tel: [phone]



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