Balfour Beatty (LSE:BBY) has agreed to sell its 50% shareholding in Gammon Construction, the Hong Kong based contractor, to a wholly-owned subsidiary of Jardine Matheson Holdings, its long-standing joint venture partner, for total cash consideration of £250 million.
The deal unwinds a partnership dating back to 2004, under which Gammon has operated as a 50:50 venture between the two groups, delivering civil infrastructure and building construction across Hong Kong.
Balfour Beatty said the sale sits within its Evolve, Energise and Explore strategic framework, launched in March, which is designed to strengthen its core business and sharpen its focus on the US and UK, the geographies where it says it sees the most potential.
The £250 million consideration is payable in three equal tranches: the first, worth £83.3 million, lands on completion today, with the remaining two due by the end of 2027 and the end of 2028 respectively.
Balfour Beatty said the first tranche will be retained as cash and folded into its year-end capital allocation review, to be confirmed at the group's 2026 full-year results.
Balfour Beatty's 50% share of Gammon's profit from operations was £36 million for the full year 2025 and £11 million in the first half of 2026, against a carrying value of £86 million as at 30 June.
Gammon's most recent additions under the joint venture included a Northern Metropolis train station and a Lantau Island residential scheme, with Balfour Beatty's 50% share of those projects totalling around £330 million; Gammon will now be reported as a discontinued operation in Balfour Beatty's 2026 financial statements.
"Balfour Beatty's investment in Gammon has been highly successful, providing a steady dividend for many years," said group chief executive Philip Hoare, adding that the board had determined Jardine Matheson was "the right buyer to consolidate ownership and fully apply their local market presence and expertise to Gammon going forwards."
The transaction gives Jardine Matheson full control of Gammon, adding scale to its newly created Jardine Engineering & Infrastructure pillar.