SYDNEY: Lendlease Corporation has entered into an agreement with Acciona Infrastructure Asia Pacific to sell its Engineering business for a purchase price of $180 million.
The transaction, which is expected to complete in the first half of calendar year 2020, is subject to conditions including client and third party consents and regulatory approvals including the Foreign Investment Review Board.
Under the terms of the Engineering sale agreement, Acciona will acquire the Engineering business excluding the NorthConnex and Kingsford Smith Drive projects, which will be completed by Lendlease.
Kingsford Smith Drive and NorthConnex are both in their final stages and are at least 90 percent complete. The Melbourne Metro project is also currently excluded. This project involves the design and construction of the tunnels and stations package of the larger Melbourne Metro Tunnel project and is being undertaken by a joint venture comprising Lendlease Engineering, John Holland and Bouygues Construction.
As previously indicated by Lendlease, the start of this project has been slower than anticipated. There have been issues in relation to the scope and costs on the project. The consortium has been working with Government on a confidential basis to resolve these issues while delivering the project to achieve the Government’s completion dates.
As a result, this project is currently being retained by Lendlease, subject to further negotiation.
Group Chief Executive Officer and Managing Director, Steve McCann said “We believe the sale of the Engineering business represents a positive outcome for our people, our clients and our security holders. Acciona is already a leader in the sector in which they operate. Our skilled workforce, client relationships and existing projects stand to enhance their existing footprint in Australia.
“Today’s announcement also represents an important milestone for Lendlease as we continue to focus on the successful delivery of our more than $100 billion global development pipeline.”
Bede Noonan, CEO of Acciona Australia and New Zealand, said, “Bringing Lendlease’s Engineering business together with Acciona will allow us to create one of Australia’s leading tier-one engineering firms. Our two organisations share an impressive register of projects within Australia and internationally. Our combined team will have an opportunity to contribute to some of the most significant infrastructure projects of our generation.”
Edited by Nayyar Iqbal