Chinese construction giant CCCI to buy Australia’s John Holland for $951 mn

Chinese construction giant China Communications Construction International (CCCI) today offered to buy one of Australia's largest construction company Leighton Holdings' building unit John Holland, for A$1.15 billion ($951 million).

The move comes a day after media reports said that China's ID Leisure International Capital plans to buy Australia's second-largest cinema chain The Hoyts Group for as much as A$900 million ($743 million).

Leighton Holdings today announced it had entered a binding agreement for the sale of John Holland to CCCI, a wholly-owned subsidiary of the Hong Kong and Shanghai stock exchanges-listed China Communications Construction Company (CCCC), the fourth largest construction company in the world by revenue, and with a market cap of around A$23.5 billion.

''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,'' said Leighton Holdings executive chairman and CEO, Marcelino Fernández Verdes.

''Following a comprehensive and extensive global sale process we have achieved a value for John Holland which reflects its position as one of the country's leading engineering and construction companies,'' he added.

The sale will reduce Leighton's gearing by around 10 per cent, while annualised revenue for the group will decline by around $3.7 billion and work in hand will fall by around $5.4 billion, Leighton said.

John Holland's more than 4,000 employees will be transferred to CCCI post sale, which requires the approval of Australia's Foreign Investment Review Board.

Founded in 1949, Leighton Holdings' is the parent company of the Leighton Group, one of the world's leading international contractors. The Group is also the world's largest contract miner.

The Sydney-based company provides development, engineering, construction, contract mining, and operation and maintenance services to the infrastructure, resources and property markets.

It operates in more than 20 countries throughout the Asia Pacific, the Middle East and Southern Africa and employs around 49,800 people.

John Holland, a wholly owned subsidiary of Leighton Holdings, is one of Australia's leading engineering, contracting and services providers to the infrastructure, energy and resources and transport services sectors.

Operating across Australia and in New Zealand, South East Asia and the Middle East, John Holland's business includes tunnelling, building and civil construction solutions in the infrastructure sector, delivery of major water and environment, energy, minerals and industrial projects in the energy and resources sector.

The 65 year-old company is also a leading provider of services to the transport sector, including railway construction, operations and maintenance, aviation services and ports infrastructure and maintenance.