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Consignia And Balfour Beatty In £1bn Joint Venture Talks

Consignia is entering into final negotiations with Balfour Beatty’s facilities management company Haden Building Management to conclude a £1 billion partnership for its facilities services business Romec which is responsible for day-to-day maintenance of the company’s 3,000 buildings.

The outsourcing of Romec and other parts of Consignia’s support services is part of a three year renewal plan to return Consignia to profitability. Outsourcing will improve support services which are not core to the postal network and save £60 million a year.

Malcolm Kitchener, Consignia’s Group Managing Director Business Services, said: “Outsourcing will help to reduce costs, increase efficiency and give our people fresh opportunities within new companies.”

The final negotiations with Balfour Beatty are based on a joint venture with Consignia retaining a 51% majority share of the new business. Conclusion of successful negotiations would mean the new company will be awarded a seven-year contract, worth £1 billion, to provide a full range of services – from office cleaning to installing and maintaining sophisticated high-security cameras and other devices.

Under the terms of the contract, the 5,000 Romec employees will transfer to the new company on existing terms and conditions under TUPE (Transfer of Undertaking Protection of Employment) legislation. Consignia has agreed with Balfour Beatty that existing employees can remain within Consignia’s pension plans.

Mr Kitchener said: “This new joint venture will enable Romec to grow faster and develop further, providing our employees with the best possible security, prospects and opportunities in the future.

“Romec already operates outside of Consignia with significant external contracts won with major retailers, banks and public sector organisations. By joining forces with Balfour Beatty, the joint venture will be in a stronger position to bid for even larger and more diverse contracts.”

Mike Welton, Chief Executive, Balfour Beatty plc, said: “We are delighted to have been selected for this strategically important partnership. We are looking forward to working with Consignia to achieve their important goals and help to develop Romec’s business outside Consignia.”

Note to editors:

Romec is part of Consignia’s support services. It has some 5,000 employees, skilled engineers, cleaners and other specialists – and is responsible for the maintenance and day-to-day running of Consignia’s buildings and office equipment.

Balfour Beatty is an international engineering, construction and services group which specialises in the creation and care of essential assets. It provides a range of skills to customers for whom infrastructure quality, efficiency and reliability are critical. The group has annual sales of over £3 billion and more than 26,000 employees.

Haden Building Management is a leading provider of integrated Facilities Management services to both the public and private sectors across the UK through a national network which employs in excess of 5,000 people. Haden Building Management is involved in major Facilities Management outsourcing activities including a contract with the Department of Work and Pensions (formerly known as the Benefits Agency) for the provision of business and administration services to over 200 properties across southern England, employing in excess of 1,400 people. It is also a founding partner in Monteray, the joint venture company responsible for British Telecom’s national facilities management contract, covering some 8,500 buildings throughout the UK.

Contact details:

Consignia Newsroom: Melanie Corfield - Tel: +44 (0)20 7250 2468
Balfour Beatty Corporate Communications: Tim Sharp - Tel: +44 (0)20 7216 6884