Acquisition

Balfour Beatty PLC
26 February 2001


BALFOUR BEATTY ACQUIRES RAIL SYSTEMS DIVISION OF ABC-NACO IN THE US FOR
$21.5 MILLION
=========================================================================

Balfour Beatty, the international engineering, construction and services
group, announces today that it has acquired the Rail Systems Division of ABC-
NACO, the US industrial group, for a total consideration of $21.5 million.

The business acquired, which will be renamed Balfour Beatty Rail Systems Inc,
provides signalling, control and communication services to rail utilities in
the USA.  Its primary activities are engineering and design services,
signalling, control and communications projects and maintenance services.  Its
project work includes turnkey signalling systems for transit customers.

The business operates nationally in the US, but with particular focus on
California, the North East and the South East.  Its largest current project is
the $51 million turnkey signalling contract for SEPTA, a Pennsylvanian transit
authority.

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

'This acquisition is a key step on the way to establishing a strong, multi-
disciplinary presence for Balfour Beatty in the US rail market.  This
business, working with Marta Metroplex, the trackwork contractors which we
acquired a year ago, creates a first-class resource.  Together with expertise
from our European-based rail businesses, we are now well-placed to serve the
market for large complex rail projects which is fast developing in the US
transit sector.'

In 2000, the business had sales of $32 million and operating profits of
approximately $2 million.  Significant growth is already in hand for 2001.
The business has net assets of approximately $10.5 million.

A number of development opportunities arise for Balfour Beatty in the US from
the completion of this acquisition.  These include track and signal
maintenance, design and construct multi-disciplinary projects and a US-based
traction power and catenary business.  Equally, the deployment of Balfour
Beatty Rail Systems Inc's capabilities in the UK and continental European
markets will offer new opportunities to the group in signalling systems and
projects, design and remote condition monitoring.

Following this acquisition and the recent acquisition of the Rail Power
Systems business of Adtranz, Balfour Beatty's annual rail turnover will
approach £700 million.

The worldwide market for rail engineering and services is growing under the
influence of rapid traffic growth, the development of mass transit systems,
rail utility restructuring and increased investment from the private sector.
It is Balfour Beatty's intent to build further on its position as a leader in
fixed rail infrastructure around the world.


Enquiries to:-

Tim Sharp
Tel: [phone]

www.balfourbeatty.com



NOTES TO EDITORS
----------------


Balfour Beatty and Rail
-----------------------

1.  Following this acquisition and the recent acquisition of the Rail Power
Systems business of Adtranz, Balfour Beatty Rail's annual rail turnover will
be approaching £700 million.  The principal activities in Balfour Beatty Rail
are in:

     -  major rail infrastructure development projects;
     -  high-speed rail electrification and power supply projects;
     -  major trackwork projects;
     -  rail renewals;
     -  signalling;
     -  maintenance;
     -  the manufacture of switches and crossings; and
     -  the supply of specialist rail plant and equipment.

2.  Balfour Beatty Rail Power Systems has annual sales of approximately
£200 million.  It 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.

3.  Balfour Beatty Rail Power Systems is working on a wide range of rail
projects around the world including the Euros 100 million Harbin-Dalian Line
in China, the Euros 60 million Nurnberg to Ingolstadt Line in Germany, the
Euros 40 million Madrid to Barcelona high-speed line in Spain, the
Euros 25 million Dupnitza-Kulata mainline project in Bulgaria, a
Euros 22 million project in Sao Paulo in Brazil, a Euros 22 million light rail
transit system in Adana, Turkey and a Euros 20 million project on the
Sunderland Metro in the UK.

4.  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.

    Marta Metroplex'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.
Balfour Beatty has recently completed the $500 million high-speed rail
electrification of the line from Boston to New Haven in the USA for Amtrak.

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.

Balfour Beatty in the USA
-------------------------

1.  Balfour Beatty has more than $650 million per annum of business in the
USA.  This is through its growing civil and specialist engineering work; its
leadership in rail trackwork through the recently acquired Marta Metroplex;
through the architectural engineering and programme management business of
Heery Inc; and the building management control systems expertise of Andover
Controls and Integral Technologies.

2.  In civil and specialist engineering, Balfour Beatty had 2000 sales of over
$340 million, covering road and interchange construction in Texas, marine
structures, large bridges and complex highways in the Eastern States and
tunnelling and seismic retrofit in California.

3.  Balfour Beatty, in joint venture with MEC, has recently completed the
overhead line electrification of the railway line between Boston and New Haven
for Amtrak in a contract valued at over $500 million.

4.  Marta Track is currently constructing a 50-mile extension to the DART
system in Dallas, Texas.  Metroplex has recently secured three major contracts
amounting to some $150 million in value.  These are to construct the BART San
Francisco Airport Extension, the Alameda Corridor Rail Project in Los Angeles
and the Southern New Jersey Light Rail System.

5.  Andover Controls is a market and technology leader in building management
and security control systems and has annual sales of over $100 million.
Integral Technologies, which was acquired in July, is a leader in security
surveillance and digital imaging technology.  Andover's clients include Merck,
AT & T and Johnson & Johnson.

6.  Heery is a leading architectural engineering and programme management
company with annual turnover of over $150 million and a client list which
includes Coca Cola, Home Depot and MBNA.