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New Zealand-based Fletcher Building has agreed to divest its construction division to France's VINCI Construction for NZD 315.6 million, with the consideration potentially rising to NZD 334.1 million subject to the finalisation of certain contracts. The sale forms part of Fletcher Building's broader strategic reset after recent earnings pressure and operational challenges within its construction business. The division includes Higgins, Brian Perry Civil and Fletcher Construction Major Projects. The transaction remains subject to regulatory approvals and is expected to close by the end of calendar 2026.
Fletcher Building has entered into an agreement to sell its construction arm to VINCI Construction, the construction subsidiary of French infrastructure group VINCI SA, for an upfront consideration of NZD 315.6 million. The transaction value may increase to NZD 334.1 million depending on the outcome of ongoing negotiations related to certain contracts within the business. Advertisement
The construction division being divested comprises three well-established operating units Higgins, Brian Perry Civil and Fletcher Construction Major Projects. These businesses are involved in civil infrastructure works, transport projects, maintenance services and major construction contracts across New Zealand. The sale includes Fletcher Construction Holdings, while some South Pacific operations are excluded from the transaction and will continue to be managed separately.
The decision follows a strategic review undertaken by Fletcher Building after a period of weaker financial performance. In the previous financial year, the company faced pressure from softer construction demand in New Zealand and Australia, particularly affecting its building materials and distribution segments. These conditions contributed to lower earnings and prompted management to reassess the group's long-term focus.
Fletcher Building's construction operations have also dealt with project-related challenges in recent years. A prolonged dispute linked to delays and cost overruns at the Auckland International Convention Centre highlighted the risks associated with large-scale construction contracts and weighed on the company's overall performance.
The company's leadership indicated that the sale aligns with its intention to concentrate on core building products manufacturing and distribution businesses, while strengthening its balance sheet. VINCI Construction, with its global experience in infrastructure delivery, is expected to provide long-term operational stability to the construction units and their workforce.
The transaction is subject to customary regulatory approvals, including clearances from relevant New Zealand authorities. Subject to these approvals and the completion of contractual conditions, the deal is expected to be finalised by the end of calendar 2026.
Source Reuters
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