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Bouygues looks at buying national player as it seeks to double in size

Bouygues has admitted for the first time it is interested in buying a national contractor in the UK.

The French firm, which has a construction turnover of £13.5 billion, has been in Britain for more than a decade but until recently has remained a high-profile peripheral player.

It has carried out a number of PFI projects including the £220 million-plus contract to build a new headquarters in London for the Home Office.

But in December it signalled a sea change when it bought Portsmouth firm Warings.

This week the chief executive of its international building division said it had the firepower to buy a big-name firm.

Olivier-Marie Rancine said: “The model we’re looking at is regional contractors but if a national contractor is ready to be sold and if it’s the right fit, has the right management and it would complement us, then we would look at that.”

Mr Rancine said the firm has begun talks with a number of firms in the Midlands about a takeover which it hopes to complete by the end of the year.

He added: “There is a lot of activity in the Midlands and we are looking very closely at that. For us overall, the UK is a strong market and it is a very interesting one.

“It is in Europe and it’s a very open market. Foreign firms have no difficulty in finding work and it’s a surprise to some of my French colleagues that a foreign firm like us has won prestigious contracts here.”

He said he saw Carillion, which Bouygues is competing against for the 2012 media centre, and Balfour Beatty as its main competitors for building work. He named Skanska and Bovis Lend Lease as major -rivals for PFI jobs.

The firm has around 300 staff in the UK and a turn-over of around Ł500 million. Mr Rancine said this could double within two years.

He said: “We are looking at growth naturally and acquisitions like Warings to create a network of companies to help us create activity outside of London.”

He said working in the UK had helped Bouygues win work overseas, particularly PFI contracts. He added: “It is a very sophisticated market here. In France, the builder gets on board at a much earlier stage with the client.

“Working in the UK it is later, which gives us the opportunity for a relationship with the QSs, consultants, engineers and architects which is a network that is helpful in areas like the Middle East and south-east Asia.”

The firm is preferred bidder on a £450 million PPP sports complex in Singapore, which includes a 55,000 seat stadium.

UK firm waits on chernobyl decision

Mr Rancine said Bouygues would decide some time later this year on a steel contractor for work to make the former nuclear reactor at Chernobyl in the Ukraine safe.

Cleveland Bridge is one of the firms bidding for the work, worth £50 million.

The reactor blew up in 1986 causing the world’s worst nuclear accident. It was subsequently shrouded in a concrete case.

A joint venture team of Vinci and Bouygues was appointed to the £300 million deal last September by state-owned company ChNPP.

Up to 20 steel arches will be constructed around 200 m away from the reactor. These will be put on rails to be wheeled into position to form the structure for a giant tent which will be used to cover the reactor and make it waterproof and airproof.

Bouygues is big

In terms of numbers and what it does, Bouygues, pronounced ‘Bweeg’, dwarfs its UK peers.

It would need Balfour Beatty, Carillion and Laing O’Rourke to merge to beat the firm’s £13.5 billion construction turnover.

As well as construction, the firm also has interests in property, utilities and telecoms and owns the main French TV channel TF1 – the equivalent of BBC 1 – as well as Eurosport. Its telecoms division, which concentrates on the mobile phone market, sponsors a cycling team which rides the Tour de France.

It has 122,500 employees across 80 countries and a group turnover of £19 billion. It expects this year’s revenue to hit £21.6 billion.