Acquisition

Carillion PLC
09 June 2003



Leading UK Business and Construction Services company, Carillion, acquires
Swedish rail business



Carillion Rail, one of the UK's leading rail infrastructure services providers,
is to expand its operations into Scandinavia through the purchase of Sweden and
Norway's largest private sector rail infrastructure contractor.



Carillion Rail has purchased Swedish Rail Systems Entreprenad (SRSE) from
HeidelbergCement Northern Europe (HCNE).  The value of the net assets to be
acquired is SEK79 million - approximately £6.2 million.



SRSE owns subsidiary companies in Sweden, Norway, Denmark and Finland and SRSE,
and its subsidiaries, will trade under the Carillion brand name.  HCNE chose to
dispose of SRSE after deciding that rail maintenance and projects were not core
activities.



Carillion Rail is an established UK market leader with maintenance contracts for
over 20 per cent of the UK's heavy rail network.  It is also a leading provider
of rail renewal and enhancement projects and has been voted the UK's best rail
maintenance operator for the last two years in the National Rail Awards.



Announcing the acquisition, Carillion chief executive John McDonough, said, 
'Transport is one of Carillion's key growth sectors.  In order to expand our
rail business beyond the UK maintenance and projects markets, we are actively
targeting the European rail market.



'The acquisition of SRSE opens up new growth opportunities in Sweden and the
wider Nordic market.  It follows recent moves by rail authorities in Scandinavia
to open these markets to wider private sector participation and to introduce
greater competition.  We estimate this market to be worth well over SEK100
billion over the coming decade.  I am delighted that we have been able to make
this important strategic acquisition, which will give us our first rail business
in mainland Europe.'



Notes to editors

Carillion Rail

Carillion Rail, based in Birmingham, is now an established market leader in the
UK with maintenance contracts for over 20 per cent of the UK's heavy rail
network.  It is also a leading provider of rail renewal and enhancement
projects, together with a comprehensive range of design and consultancy services
spanning all aspects of rail construction and maintenance.

Carillion Rail is well positioned to benefit from continuing high levels of
expenditure on maintenance and from planned investment to upgrade the UK rail
network, particularly the £7 billion programme for the West Coast Mainline.



SRSE

Employs around 250 people with major offices in Malmo, Oslo, Gothenberg,
Stockholm and Ostersund.

Current contracts include

  • £5.6 million worth of enabling trackworks for the Malmo City Tunnel for
    Banverket South Region.  Work includes the provision of 8.5 kilometres of
    new track including track, signal, catenary, electrical and telecom works,
    and 13 new switches, with the project due to be completed next Spring.
  • The maintenance of over 1,000 kilometres of track for Inlandsbanan AB,
    over a four year period from 2003 to 2007.  The contract is worth around
    £7.3 million.

Outsourcing of rail infrastructure has become a 'Nordic-wide' initiative with
the state owned rail infrastructure operations of Sweden, Norway, Denmark and
Finland working together to develop private sector competition.

Sweden is in the lead in terms of outsourcing and is targeting to increase
competition for rail projects and maintenance work from 18 per cent in 2002 to
100 per cent in 2007.



For further information

John Denning, Director Group Corporate Affairs                 01902 316426

John Davies, Corporate Communications Manager                  01902 316444


                      This information is provided by RNS
            The company news service from the London Stock Exchange