Fletcher Building sells construction division to Vinci for $273m
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The news: Building materials manufacturer Fletcher Building has agreed to sell its construction division, worth NZD315.6 million ($273.2 million), to international construction group Vinci Construction.
The sale includes Fletcher Buildings' three New Zealand building units which include Higgins, Brian Perry Civil and Fletcher Construction Major Projects. The purchase price is subject to adjustment for working capital and net debt.
The context: Fletcher said the transaction value could increase by up to NZD18.5 million in aggregate, depending on the outcome of negotiations on certain key contracts with the division. This could lift the headline value of the deal to NZD334.1 million.
The completion of this sale is subject to regulatory approval from the New Zealand Overseas Investment Office and the New Zealand Commerce Commission. Fletcher Building expects these conditions to be satisfied in the first quarter of FY27, with completion anticipated by the end of 2026.
Fletcher Building also expects to make an additional provision of between NZD55 million to NZD65 million for probable future claims relating to legacy construction contracts retained following the divestment. The company said its 2,300 employees will transfer with the division.
What they said: "Having undertaken extensive market soundings, we are confident that the sale to Vinci is the right transaction for our shareholders, Fletcher Construction and the broader New Zealand construction industry," Fletcher Building CEO Andrew Reding said.
"I believe Fletcher Construction will find a strong home with Vinci, whose strengths are well aligned with the business, and which has a proven track record of successfully delivering major infrastructure projects globally."
The source: ASX
