Acquisition

Balfour Beatty PLC
01 February 2007


1 February 2007


   BALFOUR BEATTY AGREES TO ACQUIRE CENTEX CONSTRUCTION IN THE US FOR A CASH
   =========================================================================
                         CONSIDERATION OF $362 MILLION
                         =============================

Acquisition of a leading presence in attractive commercial construction markets
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                 which creates significant growth opportunities
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                                   KEY POINTS
                                   ----------

     - A major step forward in long-term strategy of building a major domestic
       construction, services and investment presence in the US on Balfour 
       Beatty's UK model

     - A profitable, high-quality, top tier US building company, well-placed in 
       growth markets, with approximately $5.6 billion of secured and committed 
       orders

     - A proven and committed management team which has achieved consistent 
       growth with high earnings quality and predictability

     - A leading player in Florida, Texas, Washington DC and North Carolina, 
       four of the largest and fastest-growing regional building markets, with 
       a strong portfolio of long-term, blue-chip customers

     - A leading player in the military housing market where it has an order 
       book of over $750 million

     - Highly compatible business processes and culture

     - Potential to exploit new growth opportunities, working in conjunction 
       with Heery and Balfour Beatty Capital

     - Significantly and immediately earnings per share enhancing for Balfour 
       Beatty*

'Establishing a major presence in the US on the model of our UK business, with
strong capabilities in programme management, project delivery and capital
investment, is an important element in Balfour Beatty's established long-term
growth strategy.

'Centex Construction is a high-quality building company which gives us
profitable critical mass in the US in a core Balfour Beatty business and brings
substantial new business development opportunities. We anticipate that it also
will make a strong, immediate contribution to growth and generate significant
value for our shareholders.'
                                                      Ian Tyler, Chief Executive
                                                                                


                       ACQUISITION OF CENTEX CONSTRUCTION
                       ==================================

Balfour Beatty, the international engineering, construction and services group,
announces today that it has agreed to acquire Centex Construction (CC), a
leading US building company, from Centex Corporation for a cash consideration of
$362 million. At the completion of the acquisition, it is anticipated that CC
will have substantial net cash in its balance sheet. CC's average cash balances
in excess of equity for the nine months ended 31 December 2006 were
approximately $200 million. In addition to the cash consideration, Balfour
Beatty will pay Centex Corporation $4 million per annum for 15 years to secure
incremental tax benefits.

Commenting today on the acquisition, Balfour Beatty Chief Executive, Ian Tyler,
said:

'Establishing a major presence in the US on the model of our UK business, with
strong capabilities in programme management, project delivery and capital
investment, is an important element in Balfour Beatty's established long-term
growth strategy.

'Centex Construction is a high-quality building company which gives us
profitable critical mass in the US in a core Balfour Beatty business and brings
substantial new business development opportunities. We anticipate that it also
will make a strong, immediate contribution to growth and generate significant
value for our shareholders.'

Balfour Beatty is already a US leader in selected design, project and programme
management markets through Heery International and has established a presence in
the growing US private finance market through Balfour Beatty Capital. The
acquisition of CC offers Balfour Beatty additional potential to grow in its
target building and investment markets, as well as a strong, well-positioned and
well-managed business.

It is anticipated that the acquisition will be significantly earnings per share
enhancing in 2007 and thereafter* will generate significant value for Balfour
Beatty shareholders. The acquisition will enable Balfour Beatty to access
significant tax benefits and will be funded from Balfour Beatty's existing cash
resources.

Centex Corporation is selling CC in order to concentrate its resources on the US
housing market, in which it is a leading participant.

The transaction is conditional upon certain US regulatory clearances.

Centex Construction
-------------------

Centex Construction (CC) is a profitable, top tier US building company with
leading positions in the Florida, Texas, Washington DC and North Carolina
markets. CC is also a leading player in the nationwide military housing market.
It has approximately 1,500 employees. The CC management team to be acquired with
the business has a proven track record of profitable growth.

CC's business is in the construction management and delivery of institutional
and commercial buildings, particularly in the education, healthcare,
correctional, government, transportation, leisure and office sectors. Amongst
its major customers are Federal Government, Disney Corporation, Boston
Properties, Marriott, Bank of America and a range of education authorities and
healthcare organisations. It is also a major participant in the military housing
market, where it has a secured order book of over $750 million. In this market,
it operates in long-term partnership with GMH, the Pennsylvania-based developer.

CC operates through four divisions based in Florida, Texas, Washington DC and
North Carolina. It is among the market leaders in each of its territories of
operation.

Balfour Beatty has undertaken extensive due diligence, including in-depth
interaction with CC's senior and regional management teams and detailed contract
reviews.

The great majority of CC's contracts are secured through qualification-based
tendering in which final cost is agreed only after design is substantially
complete and the supply chain is in place. Thus, cost and programme risk are
substantially reduced and the business's margins are highly predictable.

Approximately 95% of its work is negotiated and 80% is through long-term
relationship customers.

Balfour Beatty attaches great importance to the skills and experience of CC's
management team who will play a key role in the further development of the
business. Balfour Beatty also believes that CC will benefit from being part of a
business focused on engineering, construction and services on an international
basis.

CC has many cultural and process similarities to Balfour Beatty's UK operations,
including a decentralised structure, clear focus on delivery, a sophisticated
risk management system, a strong bias towards long-term customer relationships,
proven processes in supply chain management and strong cash management.

Performance
-----------

In the fiscal year to 31 March 2006, CC had revenues of $1.61 billion and
operating profits of $26.8 million excluding interest on net cash balances, a
14% increase on the previous year. In its quarterly earnings announcement on 23
January 2007, Centex Corporation reported that CC had revenues of $1.65 billion
and operating profits of $27.5 million for the nine months ended 31 December
2006.

CC has a track record of strong profit growth over recent years. Its current
confirmed order book is $2.9 billion, with a further $2.7 billion of work
awarded but yet to be contracted. The business is expected to continue to grow
strongly in the medium term, supported by its strong order book and the inherent
growth potential of its core markets.

A further growth driver is the strong position the business has established in
the military housing market through a number of major long-term contracts,
including at Fort Stewart in Georgia, Fort Bliss in Texas and for Navy
accommodation in the North-East US.

At 31 March 2006, CC had gross assets of $893 million and net assets of
$278 million. Prior to completion of the acquisition, CC's net assets will be
reduced to $nil through the payment of a dividend to Centex Corporation.

Balfour Beatty in the US
------------------------

Balfour Beatty's current US businesses will continue to operate as separate
entities under their existing managements. It is anticipated that there will be
significant opportunity for Heery International, Balfour Beatty's professional
services business which provides consultancy, design, programme and project
management services, to work with CC to take advantage of changing procurement
trends in the US building market. These include increasing use of design and
build and early contractor involvement. Heery had 2006 revenues of approximately
$400 million and is a leader in the education, healthcare, federal government,
correctional/judicial and sports sectors, and operates in many of the same
regional markets as CC.

CC's substantial presence in state markets in which private finance is playing
an increasing role and in the military housing market will also help accelerate
the development of Balfour Beatty Capital's PPP business, based in Atlanta.

The acquired business will change its name to Balfour Beatty following the
acquisition. Once the acquisition is completed, Balfour Beatty's annual revenues
in the US will amount to approximately $3.5 billion, 80% of which will be in the
building sector through CC and Heery. US sales are likely to represent
approximately 23% of proforma Group revenues.

                                      ENDS


Enquiries to:
-------------
Tim Sharp
Tel: [phone]
www.balfourbeatty.com


Notes
-----

*    Statements as to earnings per share enhancement do not constitute a profit
     forecast and should not be interpreted to mean that Balfour Beatty's 
     earnings per share will necessarily exceed or match those of any prior 
     year.



                              * * * * * * * * * *

THERE WILL BE A BRIEFING FOR ANALYSTS TODAY AT 9.30 AM AT ABN AMRO, 250
BISHOPSGATE, LONDON, EC2.

There will be a live webcast of this presentation on www.balfourbeatty.com and
the slides presented will be available on the website from 10.30 am.

                              * * * * * * * * * *

High resolution photographs are available to the media free of charge at
www.newscast.co.uk (tel [phone]).



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