A potential purchase of CH2M, the engineering consultancy involved in some of the UK’s biggest infrastructure works, could be scuppered by a host of troubles the business faces.

US-based CH2M, which has won high-profile contracts including the refurbishment of Parliament, is understood to be in advanced talks with Jacobs Engineering about a $1.5bn (£1.2bn) takeover.

However, CH2M faces a series of problems that could see Jacobs abandon a deal or negotiate a knock-down price.

A source close CH2M said: “There’s pressure to do something but there are some big problems within the business that could hit pricing.” CH2M and Jacobs declined to comment.

These problems include the potential for major liabilities from problems on two major contracts: the over-running MoPac toll road project in Texas and construction of a power plant in Australia which CH2M pulled its staff off at the start of the year, with the project suffering huge delays.

CH2M’s troubles also include declining profits in the toughening construction market. This is causing issues with its employee ownership model, which relies on younger staff buying in to the company and older staff selling out.