Skanska acquires Kvaerner Construction and 50 percent of Gammon
Skanska has signed an agreement with Kvaerner Group to acquire Kvaerner Construction and its 50-percent holding in Gammon China Ltd for NOK 2.3 billion (SEK 2.4 billion) net of cash. The agreement is subject to confirmatory due diligence and regulatory approvals.
August 29, 2000 Skanska acquires Kvaerner Construction and 50 percent of Gammon
Skanska has signed an agreement with Kvaerner Group to acquire Kvaerner Construction and its 50-percent holding in Gammon China Ltd for NOK 2.3 billion (SEK 2.4 billion) net of cash. The agreement is subject to confirmatory due diligence and regulatory approvals. Kvaerner Construction is the fifth-largest construction company in the UK. Gammon is the largest construction company in Hong Kong and has significant presence also in China, Singapore and certain other Southeast Asian markets. Kvaerner Cementation India, a 64-percent owned subsidiary, is one of the five largest construction companies in India. In 1999, Kvaerner Construction had net sales of NOK 16.6 billion, of which NOK 4.2 billion from its 50-percent interest in Gammon. For 2000, the projected EBIT for the combined operations stand-alone is more than NOK 350 million, of which more than NOK 100 million is from Gammon, before amortization of goodwill. Operations of the acquired companies comprise building and civil engineering construction, foundations, mining development, mechanical and electrical installations, as well as construction and design services. "The acquisition of Kvaerner Construction is a further significant step in our strategy to broaden our geographical market presence, which potentially gives us opportunities to introduce value-adding activities into new local markets", says Claes Björk, President and CEO of Skanska. "This acquisition gives us a leading position in the UK and also a significant presence in several Asian markets and I regard it as very important for Skanska’s continued development." "We are acquiring a well-managed operation, which under its present management has achieved an impressive turnaround over the last few years. In line with our experience from previous acquisitions, we look forward to supporting the company in achieving accelerated and profitable growth", says Anders C. Karlsson, Head of Skanska Europe. "I feel confident that our business will benefit from being a part of the Skanska Group. We have a shared strong focus on core business and Skanska´s resources will be important. It is expected that the sale will be completed by early October, following a 30-day due diligence," says Keith Clarke, President of Kvaerner Construction, who will stay on as head of the company. Kvaerner Construction will operate under the Skanska trademark in the future. Skanska has on-going joint venture projects in the UK with Costain, in which it also holds a 7.6-percent interest. Skanska will honor all of its commitments relating to these joint venture projects. __________________________________________________ For further information please contact: Anders C. Karlsson, Head of Skanska Europe, +46 70 524 74 80 Staffan Schéle, Corporate Finance, Skanska AB, +46 8 753 88 00 Sofia Heidenberg, Acting Information Manager, Skanska AB, +46 70 524 67 80 Key data, Kvaerner Construction 1999 (including Gammon, 50 percent)
Net sales: NOK 16,622 M (SEK 17,619 M) Operating profit: NOK 228 M (SEK 241 M) Net debt: NOK 0 (SEK 0) Order backlog: NOK 17,521 M (SEK 18,572 M) Number of employees 11,600 (Gammon’s share 4,700) The above figures include Kvaerner's share of net sales in Gammon, which totaled SEK 4,432 M and the company's portion of operating profit was SEK 94 M before amortization of consolidated goodwill. A picture of Skanska CEO Claes Björk for publication is available at www.skanska.se/marknadsplats