Group 4, Securicor in £2bn deal

THE WORLD's second and third-largest security companies have agreed merger terms to create a massive business that will be headquartered in London.

Group 4 Falck and Securicor will have 340,000 employees and directors admitted today that the merger will inevitably result in redundancies. They would not comment on how many until negotiations begin with workers over the creation of Group 4 Securicor.

Shares in both companies rose sharply as they envisaged annual cost savings of £35m a year, far higher than analysts had forecast when merger talks were first announced at the start of this month.

Securicor shares shot up 14p to 132p, valuing the group at £702m. In Copenhagen, Falck's shares rose seven Danish kronor to 159.5 kronor, valuing it at £1.3bn.

With the combined group valued at £2bn, it should be a certain entry into the FTSE-100 index when the deal is completed this autumn. The shares will be listed in London and Copenhagen.

Group 4 Falck will at the same time demerge its rescue and global solutions (including prisoner escort) businesses. The merged business will be 57.5%-owned by Group 4 shareholders and 42.5% by Securicor's, which is slightly better than London analysts had expected. It operates in 108 countries guarding premises, running alarm systems and handling cash.

Securicor's Nick Buckles will become deputy chief executive and chief operating officer. Narby Johansen, chief executive of Falck and of the new group, said: 'The merger increases our presence in the UK, Germany and Ireland and gives us critical mass in cash handling.

'Securicor has been running a very profitable cash-handling business, while our business is limited. Merging the two creates critical mass.'