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Leighton Holdings of Australian Buys stake in Al Habtoor

Al Habtoor Engineering and Leighton Holdings of Australia have agreed to join forces in a landmark transaction worth Dh2.6 billion ($715.4 million) for a 45 per cent stake in the Dubai-based company.

The newly merged entity, Al Habtoor-Leighton will become one of the region's largest multi-disciplined contractors. In this transaction, Leighton Holdings will merge its Leighton International operations in the Arabian Gulf with Al Habtoor Engineering and acquire a 45 per cent stake in the Dubai firm, a move which analysts believe signals the beginning of a new era of mergers and acquisitions involving Gulf's family-owned companies and international groups.

According to Khalaf Al Habtoor, Chairman of Al Habtoor Holding, the strategic tie-up would enable Al Habtoor Engineering to provide the broadest spectrum of construction services, which will further enhance its competitive edge and leadership position.

Analysts said the tie-up with Al Habtoor, one of the biggest engineering firms in the region and one of the builders of the iconic Burj Al Arab, would enable Leighton increased access to a growing market with low risk.

Riad T Al Sadik, Managing Partner of Al Habtoor Engineering, said it was a key strategic move that lays strong foundations for the expansion of both Al Habtoor Engineering and Gulf Leighton in the broader region.

"The combined resources of Al Habtoor Engineering and Leighton will create one of the strongest construction platforms in the region".

Chief Financial Officer of Leighton Holdings, Scott Charlton, said he was delighted to be aligning the Leighton Group with Al Habtoor Engineering, one of the leading construction contractors in the Gulf. "Al Habtoor is regarded as one of the leading builders in the region. Their track record in large-scale building projects is second to none and this complements our expertise in large-scale civil infrastructure projects," said Charlton.

Managing Director of Leighton International, David Savage, said in a statement that Leighton's presence in the Gulf construction market would now be substantially strengthened.

"Since establishing Gulf Leighton just over two years ago, we have secured a number of iconic projects including the Al Shaqab equestrian centre in Doha, Qatar and the Saadiyat Island Expressway in Abu Dhabi.

Leighton International has developed a considerable presence in the Gulf region in its own right but this investment provides us with a quantum leap in one of the world's fastest growing construction markets," said Savage.

"The partnership with Al Habtoor provides us with the increased capacity we require to really capitalise on the huge number of opportunities available. The unique strengths that each company brings will enable all parts of Al Habtoor-Leighton to grow and produce strong results. Al Habtoor has a highly qualified, experienced and professional team with a multi-national workforce in excess of 25,000 employees, and market-leading capability in major building projects," he said.

The consideration paid by Leighton for the stake includes cash and the contribution of Gulf Leighton's assets.

The transaction values Al Habtoor Engineering at Dh7 billion.

EFG-Hermes acted as sole financial adviser to Al Habtoor Engineering on the transaction.

Leighton Holdings Limited is the parent company of Australia's largest project development and contracting group.


Anonymous BusinessT said...

i think its a very good step, that will set model for the other businesses to follow

1:18 PM  
Blogger bizzwhizz said...

yes I agree and I think it will serve as a better bridging step for companies before they go public. Issues with financial cycle can be better understood by them

1:26 PM  

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