Acquisition

Balfour Beatty PLC
21 December 2001

  BALFOUR BEATTY ACQUIRES RAIL ELECTRIFICATION PROJECT BUSINESS FROM ABB FOR
                                Euro42 MILLION

  Leadership in Growing Fixed Rail Infrastructure Engineering Market Further
                                 Consolidated



                                  KEY POINTS

- A further substantial acquisition in a long-term growth market
- Consolidates international leadership position for Balfour Beatty in fixed
  rail infrastructure contracting
- Provides comprehensive electrification market coverage in European rail
  markets
- Excellent fit in geography and technology
- A major presence in Italian, Portuguese and Greek markets
- Substantial order book with extensive further expenditure already planned on
  rail in Italy
- Earnings enhancing

'This transaction further strengthens Balfour Beatty's position as market
leader in the provision of fixed rail infrastructure with projected worldwide
annual revenues of approaching £800 million. With investment in rail
infrastructure on a steady upward trend, Balfour Beatty's many strong market
positions and world-recognised technology put us in an excellent position for
growth.'
Mike Welton, Chief Executive





  BALFOUR BEATTY ACQUIRES RAIL ELECTRIFICATION PROJECT BUSINESS FROM ABB FOR
                                Euro42 MILLION

  Leadership in Growing Fixed Rail Infrastructure Engineering Market Further
                                 Consolidated



Balfour Beatty, the international engineering, construction and services
group, announces today that it has acquired the rail electrification project
business of ABB for a total consideration of Euro42 million.

The business acquired designs, manages, installs and commissions railway
electrification systems and services internationally. It operates principally
on major high-speed electrification projects in Italy and has established
market positions in Greece, the UK and the Netherlands. It is also active in
the mass transit market with, in particular, a major project under way in
Portugal. Its principal customers are TAV, the Italian state railway company
high-speed division, the transit authority of the City of Porto and the Greek
state railway company.

The acquired business will have estimated 2001 sales of approaching Euro100
million and operating profits of approximately Euro8.5 million. Its order book
stands at over Euro300 million, principally through its participation in three
major long-term Italian high-speed rail developments, but also in secured work
on Metro de Porto in Portugal and on the Athens-Thessaloniki contract in
Greece. It employs 350 people.

It is anticipated that the acquisition will be earnings enhancing in 2002*.
The acquisition will be financed from Balfour Beatty's existing cash
resources.

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

'This transaction further strengthens Balfour Beatty's position as market
leader in the provision of fixed rail infrastructure with projected worldwide
annual revenues of approaching £800 million. With investment in rail
infrastructure on a steady upward trend, Balfour Beatty's many strong market
positions and world-recognised technology put us in an excellent position for
growth.'

The Italian rail market benefits from substantial government investment. In
the 10-year plan published in 2000, more than Euro40 billion was allocated to
mainline rail and a further 15% to mass transit schemes. The first section of
a new link between Milan and Turin is scheduled to begin in 2002, with further
sections of that route and the development of four other major schemes planned
for 2003 onwards.

The acquired business has a strong and established management team and
first-class technology and resources. Balfour Beatty's rail traction power and
control system capabilities and market coverage will be substantially enhanced
as a result of the transaction.

The acquired business has a number of existing working relationships with
Balfour Beatty Rail Power Systems, the electrification and power supply
business based in Germany which Balfour Beatty acquired from Adtranz last
year. It will become part of Balfour Beatty Rail Power Systems.

The acquisition price is based on a net asset value of Euro9 million with a
mechanism for adjustment on agreement of the closing balance sheet. The
transaction is subject to customary regulatory review in Italy.

Investment in the world's rail infrastructure is growing under the influence
of rapid traffic growth, increasing demand for high-speed routes, the
development of mass transit systems and rail utility restructuring.



* This statement should not be construed as a profit forecast or be
interpreted to mean that the future earnings per share of Balfour Beatty will
necessarily match or exceed earnings per share for completed financial
periods.








Enquiries to:

Tim Sharp
Tel: [phone]
www.balfourbeatty.com



Notes to Editors

1. Balfour Beatty's 2001 worldwide turnover in rail engineering and services
will be approximately £700 million.

2. The acquired company's principal contracts are for the electrification of
the lines from:

- Rome to Naples
- Bologna to Florence
- Milan to Bologna
- Athens to Thessaloniki (Greece)
- Metro de Porto (Portugal).

3. Through Balfour Beatty Rail Power Systems, the company is already a leading
international rail electrification and power supply specialist. With annual
sales of Euro250 million, Balfour Beatty Rail Power Systems has strong market
positions in Germany, Austria, Sweden, Spain, China, Malaysia and South
America. Its principal current contracts are the Euro100 million Harbin-Dalian
Line in China, the Euro60 million Nurnberg to Ingolstadt Line in Germany, the
Euro24 million Madrid to Barcelona high-speed line in Spain, a Euro22 million
project in Sao Paulo in Brazil and a Euro21 million main line project from
Qinhuangdao to Shenyang in China.

4. In the UK, Balfour Beatty Rail is a major supplier to Railtrack, including
major infrastructure development work on the West and East Coast Main Lines in
electrification and infrastructure upgrades; infrastructure services
provision, principally in Wessex, Kent and Anglia & Great Eastern; the
manufacture and supply of switches and crossings; the supply of specialist
rail plant; and the provision of specialised technologies and technical
expertise. Balfour Beatty is also undertaking major project work on the
Channel Tunnel Rail Link.

5. In the USA, Balfour Beatty is a market leader in trackwork through Marta
Track Constructors Inc and Metroplex Corporation and a specialist in
signalling technology and engineering through Balfour Beatty Rail Systems Inc.
It was responsible for the $500 million electrification of the new high-speed
North-East Corridor link between Boston and New Haven for Amtrak. Current work
includes major projects in Los Angeles, Dallas, New Jersey and Pittsburgh.
Many major rail development projects in the US are currently in the
prequalification and bidding process and federal appropriations for future
high-speed and mass transit rail transportation projects stand at record
levels.