Acquisition

Balfour Beatty PLC
10 October 2001

                BALFOUR BEATTY ACQUIRES JOHN KENNEDY HOLDINGS,

            A LEADING UTILITY SERVICE CONTRACTOR, FOR £43 MILLION

Balfour Beatty plc, the international engineering, construction and services
group, announces today that it has agreed to acquire John Kennedy Holdings
(Kennedy), a leading UK utilities service business, for a total consideration
of approximately £43 million (including the assumption of debt). Completion of
the transaction is expected to take place today.

Kennedy provides the group with a strong position in a growing sector of the
utilities market. It also adds strength to Balfour Beatty's support service
business portfolio which forms an increasing component of its business in the
creation and care of essential assets.

Kennedy comprises two operating businesses, John Kennedy Civil Engineering and
Pipeline Consultants.

John Kennedy Civil Engineering provides maintenance and renewal services to
utilities in respect of their underground assets, principally in the gas and
water sectors. The business has term contracts of up to five years' duration
with a number of regional water utilities and with Transco. Several of these
contracts are under partnering arrangements.

Pipeline Consultants provides design consultancy and management services to a
number of regional water utilities.

In the year ended 31 March 2001, Kennedy had sales of £72.9 million and an
operating profit of £4.5 million, before goodwill amortisation, representing
an operating margin of 6%. At 31 March 2001, Kennedy had net assets of £12.7
million, including goodwill of £15.7 million. The company has an order book in
excess of £200 million, which gives it substantial growth opportunities for
the year to 31 March 2002 and beyond.

Commenting on the acquisition, Balfour Beatty Chief Executive, Mike Welton,
said today:

'The acquisition of Kennedy further expands our already strong position in
infrastructure services and provides us with a quality business which has a
significant opportunity to grow with the fast-expanding requirements for
maintaining and upgrading utility networks.'

Following privatisation, gas and water utilities have developed a much greater
propensity to outsource asset maintenance, renewal and other services. This
trend is accelerating as utilities seek to outsource an increasingly wide
range of asset management and other operational services in addition to
maintenance and renewal. In addition, safety considerations are resulting in
markedly increased investment in asset renewal, particularly in the gas
sector.

Kennedy is being sold by its current and past management and by clients of
Aberdeen Murray Johnstone Private Equity (AMJ), with whom a management buyout
was executed in 1997. It is headquartered in Manchester and employs
approximately 1,200 people. The business operates principally in the Midlands,
north and south-west England and Scotland. Its principal customers are
Transco, Southwest Water, United Utilities, Severn Trent Water, Yorkshire
Water and the Scottish water authorities.

The consideration for the acquisition will be satisfied from the group's
existing cash resources and by the issue of guaranteed loan notes payable up
to 30 April 2005. Up to £0.25 million of consideration is payable to
management shareholders dependent on the profit performance of the business
for the two years ending 31 March 2003.

It is anticipated that the acquisition will be earnings enhancing from the
date of completion.



Enquiries to:

Tim Sharp

Tel: [phone]

www.balfourbeatty.com