China Communications Construction Will Buy Canada Engineering Firm Aecon Group for USD1.26 Billion
Tang Shihua
DATE:  Oct 27 2017
/ SOURCE:  Yicai
China Communications Construction Will Buy Canada Engineering Firm Aecon Group for USD1.26 Billion China Communications Construction Will Buy Canada Engineering Firm Aecon Group for USD1.26 Billion

(Yicai Global) Oct. 27 -- China Communications Construction Co. [SHE:601800; HK:01800]  (CCCC) will acquire 100 percent of stake of Canadian construction company Aecon Group Inc. [TSE:ARE] via a special purpose vehicle (SPV) to stake out a presence in Canada's construction market with Aecon Group's leading position in the industry.

The parties concerned have already penned an agreement on the acquisition for a total transaction amount of USD1.26 billion (CAD1.45 billion), the large infrastructure services provider announced yesterday.

When the acquisition concludes, Aecon will become an indirectly wholly-owned subsidiary of CCCC and delist from the stock exchange, per the announcement.

CCCC's bid for the shares of the Aecon company is CAD20.37, as compared with the company's shares on Aug. 24, 2017, i.e. the last trading day before Aecon published a notice confirming that it had commissioned a financial advisor to seek a potential sale, the final price premium was 42 percent on the Toronto Stock Exchange, per the announcement.

The acquisition will be a substantial breakthrough for the company to enter the North American market and it will generate synergy in the construction business with Aecon and grow the company's business with the aid of Aecon's strength in the energy and mining sector, per the announcement.

After the acquisition, the company will also activate the Aecon Group and its Australian John Holland Co. to exercise a synergistic effect, enhancing the company's competitive capabilities in the high-end mature market, it added.

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Keywords:   China Communications Construction Co.,Canada,Aecon Group,Assets Acquisitions,Construction