Separate defence division likely to emerge after company considers how best to assimilate contractor

The board of Carillion is expected to carry out a major restructure of the business in the next few months after the acquisition of Mowlem.

Building understands that Carillion has appointed an internal due diligence team to examine integration next month and will make recommendations on how the firms can best work together.

Currently Carillion has its services and construction businesses together in a business unit run by director Don Kenny. But it is understood that the board may rethink this format, as it would create a section with a turnover of more than £3bn.

Under Carillion's existing structure there are also separate transport and health divisions, run by Paul Kirk and Adrian Bull respectively, with separate international and PFI units.

It would be madness not to build a business around defence

Carillion source

One source said the restructuring would probably see the emergence of a defence division. The source said: "Such is the scale of Mowlem's £5bn Allenby and Connaught defence project that it would be madness not to build a business around the experience and expertise such a project will bring."

The source added that further revisions of the structure would emerge in the wake of next month's due diligence on integration.

Meanwhile Carillion shareholders have voted overwhelmingly for the acquisition. Rival bidder Balfour Beatty agreed to pull out of the race after a deal was struck in which it withdrew its bid in exchange for being first in the queue to buy some parts of the Mowlem business and contracts from Carillion. Mowlem shareholders will vote next week on the deal.