BUILDING conglomerate Leighton Holdings has confirmed the sale of its subsidiary construction firm John Holland to the China Communications Construction Company (CCCC) for $1.15 billion, in a move expected to affect more than 4000 employees.
The sale was confirmed last Friday after speculation the multi-national company would restructure its assets following the majority acquisition of Leighton Holdings by Spanish-owned construction group ACS earlier in 2014.
“In June 2014 we announced that, as part of our Strategic Review we were analysing options for our Services, Property and John Holland businesses, including the potential divestment of, or introduction of new partners to, these businesses,” Leighton Holdings chief Marcelino Fernandez Verdes said.
“The divestment of John Holland demonstrates the progress we have made with our Strategic Review initiatives over the past six months to strengthen the balance sheet, streamline the operating model and improve project delivery.”
Leighton estimates approximately 4,100 people would have their employment transferred with the business.
“The existing John Holland management will work closely with CCCI to ensure a smooth transition so that the business continues to safely and efficiently provide services to its clients,” Mr Fernandez Verdes said.
CCCC International is the first Chinese-owned construction firm to enter into the Australian market and with the acquisition of John Holland, will become the third largest operating in Australia after Lend Lease and Leighton.
President of the firm Lu Jianzhong said the acquisition was a ‘momentous step for the company’.
“We believe there are very significant growth opportunities in the Australian market, and clearly in the acquisition of John Holland, we are recognising the strong leadership and solid performance of the business,” he said.
“From our perspective, ownership of John Holland is the optimal way for CCCC to participate in this dynamic market as part of our aim to be a global transportation infrastructure business. It will be an important strategic addition to CCCC and we see JHG as a strong independent competitor in the Australian market.”
John Holland group managing director Glenn Palin said the company was ‘excited about the opportunity that joining with CCCC International presents for the business’.
“From our point of view, John Holland and CCCC International are extremely complementary, through a shared dedication to technical excellence and innovation, and a pride in company history and values,” Palin said.
“With the strength and capability of CCCI backing us, John Holland is set for a bright future in the Australian infrastructure market.”