Murray & Roberts banks on Aveng merger to bolster international presence

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Murray & Roberts banks on Aveng merger to bolster international presence

Construction firm Murray & Roberts believes that the planned merger with engineering firm Aveng will boost its major markets like Australia and Africa, CEO Henry Laas has said.

He said that the primary objective of the potential transaction is to establish a large multinational engineering and construction group with the scale necessary to compete more effectively in relevant markets.

“In this context, we at Murray & Roberts believe that the strategic rationale for the potential merger of Murray & Roberts and Aveng is compelling for both stakeholders, said Mr Laas.

Aveng also banks on this acquisition to help revive its financial standing.

There has been no formal offer so far but the planned merger will be discussed in June 19 during Murray & Roberts’ general meeting.

Read:Aveng subsidiary plans to retrench 2863 workers, says union

Aveng shareholders on the other hand will be meeting on May 29 to consider matters related to the capital raising and M&R take-over.

The latest move by Murray & Roberts to acquire Aveng comes a few months after Germany firm Aton showed interest to acquire the firm. Shareholders were however advised against the move because according to a report, it under-values M&R. This position is supported by M&R management.

“If a formal offer is made, we will buy out Aveng’s stock worth 1 billion rand by issuing new shares, assuming that Aveng separately raises at least 300 million rand in new capital through its proposed rights offer,” said M&R in a statement.

Read Also:South Africa firms dominate shortlist for infrastructure awards

However,should Aveng not be able to raise 300 million rand, the transaction value will be reduced, it added.

The acquisition plan could proof a major step forward for Aveng that has been struggling financially after being hit by a slump in South Africa’s construction industry. Aveng is also contending with a debt-burden of 3.25 billion rand but has embarked on a shakeup of its business.

Its shares shot up nearly 30 percent at one point on news of the deal, before it pared gains.

Murray & Roberts focuses on mining, oil & gas and power & water sectors  in the Southern Africa, North America and Australasia regions.

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