Leighton Holdings Ltd. has agreed to sell its John Holland building division to China Communications Construction Co. (CCCC) (01800.HK, 601800.CN) for about A$1.15 billion (US$950.9 million).
The deal will give the Chinese firm a large foothold in Australia while allowing Sydney-based Leighton to cut debt as its German parent company tightens its grip, the Wall Street Journal reported.
It will require approval from Australia’s Foreign Investment Review Board.
The sale follows a strategic review launched in June by Marcelino Fernandez Verdes, the chief executive of majority owner Hochtief who took the reins at Leighton in March.
Leighton is also considering the sale of its services and property businesses or taking on partners as it refocuses on such operations as engineering and contract mining, the newspaper said.
Fernandez Verdes said proceeds of the John Holland sale will be used to cut Leighton’s debt-to-equity position and finance growth, particularly in public-private partnerships.
The John Holland business provides contracting and engineering services to industries including energy and mining, with operations across Australia and New Zealand as well as in Southeast Asia and the Middle East, the report said.
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