Italy’s Webuild confirms acquisition of Australia’s Clough
Webuild has announced that it has signed a contract with the Deloitte Administrators of Clough Limited, the Australian engineering and construction company based out of Perth, to acquire Clough assets.
Following disclosures on December 14, 2022, and January 19, 2023, the final acquisition perimeter comprises of 1) Clough’s organisation, including offices, trademarks, credentials, business references, senior management, and office personnel, and 2) more than €4 billion worth of projects in backlog (as of the end of 2022), including the related project workforce, a statement said.
The integration of Webuild and Clough will guarantee the continuity of Clough projects and the ongoing employment of 1,100 employees. It will also create a group that will rank amongst the largest and oldest in Australia.
Furthermore, the current projects included in the transaction are amongst the most important in Australia and Papua New Guinea, and the agreement will allow the delivery for all levels of government, local communities, and businesses involved. It will also ensure that subcontractors and suppliers contracted to the projects within the perimeter will be paid to complete their contracted works.
The transaction would enable Webuild to:
- Strengthen its organisational, engineering and workforce structure in Australia, instrumental to the execution of its order backlog and commercial plan. Webuild is set to benefit from a booming market with hundreds of billions of investments expected in the coming years.
- Acquire a strong and structured local presence with more than 100 years’ long history, deep Australian roots, and tradition.
- Benefit from scale and significant synergies by enhancing Clough's central resources, which are specialised in commercial planning and business development, bid preparation, human resources management, procurement management, administration, finance and control.
- Expand and diversify Webuild’s business by leveraging Clough’s competencies, capabilities, good market positioning and strong reputation in sectors such as energy, installations, and defence.
“The operation is a historic one for Webuild. It is the latest effort on the part of the Group to expand in low-risk markets according to a de-risking strategy adopted in recent years. With the acquisition of Clough, we will become one of the biggest players in the sector, even in segments like energy, plants and defence infrastructure in a market that is growing at a fast pace,” Pietro Salini, CEO of Webuild, said.
“By combining the expertise of Clough’s and Webuild’s people, we will be able to guarantee the completion of projects of the highest quality for clients and communities. From the beginning of this operation, we have been able to create a strong team spirit.
“I want to thank all the parties involved for having worked in such a tireless and collaborative way in order to reach an extraordinary result within a short period of time despite the complexities of a number of projects, the time differences and the great distances. Thanks to the constructive and collaborative efforts made by the people at Webuild, Deloitte and Clough, as well as by the clients, unions and all the other partners involved in these projects, we were able to guarantee the continuity of some of the most strategic projects of the country,” he added.
The total value of the transaction is equal to approximately AU$35.9 million (€23.4 million). The completion of the acquisition remains subject to obtaining certain consents from third parties involved in the operation, including the approval at the second meeting of creditors, which is expected to be held in mid-February 2023, the statement highlighted.
Australia is a core market for the Italian construction giant as it has potential construction contracts estimated in excess of €300 billion for the 2022 – 2025 period, it said. Webuild is continuing to expand its operations in the country, with its portfolio including the construction of the Sydney Metro-Western Sydney Airport project that will connect the city to the new airport. It is also working on the North East Link, which is the missing section of Melbourne’s beltway.
In addition, the company is part of a consortium that is the preferred bidder for the construction of a section of Inland Rail, which is designed to improve freight transport between Brisbane and Melbourne. In the Snowy Mountains, the group is working on Snowy 2.0, which is the largest hydropower project in Australia.
Founded in Perth in 1919, Clough is regarded as a pioneer in the country’s construction industry. Some of its landmark projects include the National Mutual Building, the first high-rise in Perth, and the Graham Farmer Freeway, the first major underground freeway tunnel in Western Australia.
“It took a big effort for an Italian company to reach a combined backlog of more than €12 billion and some 3,000 employees in Australia. But we consider this to be just the beginning of a great collaboration with all the players in a country where we aim to grow together,” Salini concluded.