Chinese construction company inks deal to buy Canada’s Aecon Group for $1.5B
The company will retain its Canadian headquarters and management team and said the scale of China's CCCC International Holdings will let it take on larger and more complex projects
TORONTO—Aecon Group Inc. has signed a deal to be acquired by CCCC International Holding Ltd. in a deal that values the construction company at $1.5 billion.
The Chinese company has agreed to pay $20.37 per share in cash for Aecon, which announced in August that it was exploring the possible sale of the company.
“We believe this is a very positive outcome for Aecon and our key stakeholders,” Aecon chairman Brian Tobin said in a statement Oct. 26.
“This transaction is the result of an active and diligent sale process that has enabled us to select an outstanding partner and create significant shareholder value.”
Aecon shares closed at $16.52 on the Toronto Stock Exchange on Wednesday.
CCCI is the overseas investment and financing arm of China Communications Construction Company Ltd., one of the world’s largest engineering and construction groups.
The companies said Aecon will continue to be headquartered in Canada while CCCI’s size and financial strength will help it bid for larger and more complex projects.
“Aecon has a strong management team and a very impressive track record that have made it a leading construction company in Canada and a pioneer in public private partnerships and concession operations,” CCCI president Lu Jianzhong said.
It will now gain access to significant capital, complementary infrastructure expertise and an international network to support its growth ambitions.“
The offer requires the approval of two-thirds of the votes cast at a special meeting of Aecon shareholders as well as government and regulatory approvals under the Investment Canada Act, the Canadian Competition Act and authorities in China.
The announcement of the deal came as Aecon reported a third-quarter profit of $24.6 million or 37 cents per diluted share, down from a profit of $27.4 million or 42 cents per diluted share a year ago.
Revenue fell to $759.7 million compared with $838.1 million in the same quarter last year.