Your browser is no longer supported

For the best possible experience using our website we recommend you upgrade to a newer version or another browser.

Your browser appears to have cookies disabled. For the best experience of this website, please enable cookies in your browser

We'll assume we have your consent to use cookies, for example so you won't need to log in each time you visit our site.
Learn more

American Beatty

Business - Balfour Beatty closed the deal on its latest American acquisition last Friday. Jackie Whitelaw reports.

Andy Rose, one of Balfour Beatty's four group managing directors, is quietly pleased at the progress the UK's biggest contractor is making in the enormous US market.

On Friday the business formally acquired US builder Centex Construction and on Monday Rose's role changed to allow him to concentrate solely on developing business in North America.

Centex Construction also changed its name to Balfour Beatty Construction in the US. Arrival of the £1bn turnover company will push BB Group's turnover in the US to £1.65bn, 23% of the total, in the coming year. BB's stock rose 14% on announcement of the Centex purchase.

'It is a transformational development for the Balfour Beatty business, ' says Rose.

The City and other BB companies in the US now know that the contractor is deadly serious when it says it wants to turn North America into its second domestic market, accounting for half of group turnover.

It seems to have worked out how to achieve it, too, without getting badly burned, as has happened so many times before when UK firms head over the Atlantic. Heery, acquired in 1986, has grown solidly and the rail and infrastructure companies are nding their feet.

But it's not been a smooth ride all the time, admits Rose. The contractor has learned a lot since it first turned up in the US 'on an expeditionary basis' in the mid-1980s. 'The outside view of the States is that it's big, it has a large population, they speak English and have a lot of money, ' says Rose. 'But it's difcult. It is not one market - there are as many as there are states.

'They all have their own regulations, laws, sources of funding, suppliers and subcontractors. You step in at your peril.' He paraphrases former US defence secretary Donald Rumsfeld when mulling over a particularly problematic signalling job inherited with one purchase when creating the American rail business: 'It's not what you know when you are buying, but what you don't know.

'You need to know what you don't know. And you need to know the right questions to ask which won't be the obvious ones.

'Don't be fooled that because the Americans speak English you understand each other, ' adds Rose. 'PPP means one thing to us and something else to them, for instance. It could be design and build, it could be buying and running a piece of infrastructure.

Using shortcuts in language is dangerous.' As well as possible language barriers, Rose says you have to appreciate how truly local the market is. 'In Virginia they like to work with Virginians and have the same concerns about businesses from other states as they would from other countries.

Allow good, competent, local US management to guide you.' Above all, don't be arrogant and bullish, he advises. Centex chairman and chief executive Robert Van Cleeve, who now runs Balfour Beatty Construction in America, sent Rose a list of what had attracted his business to the BB bid.

'There was no chest-beating, no bravado, just realistic, smart people who put effort into understanding our business, ' states Cleeve's list.

'We liked that there was no one BB culture, that there was local autonomy, that people and health and safety were highly valued. And the management had humility.'

Balfour Beatty in the US

Heery International 1,000 people, $275M turnover

Balfour Beatty Rail 750 people $100M turnover

Balfour Beatty Infrastructure 1,000 people, $275M turnover

Balfour Beatty Construction (Centex) 1,400 people $1bn turnover

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions. Please note comments made online may also be published in the print edition of New Civil Engineer. Links may be included in your comments but HTML is not permitted.