Fletcher Building to sell construction arm to Vinci in $315m deal

The deal covers Higgins, Brian Perry Civil and Major Projects units.

Fletcher Building has agreed to sell its construction division to global infrastructure group Vinci Construction in a deal worth $315.6 million, subject to various conditions and adjustments.

The final price could rise to $334.1m, with up to $18.5m in additional payments dependent on the outcome of several key contracts currently under negotiation.

Separately, Fletcher Building said it expected to take additional provisions of $55m–$65m for legacy construction claims that remain with the group, excluding any potential NZICC litigation.

Chief executive Andrew Reding said the sale reflects Fletcher Building’s ambition to refocus on its core manufacturing and distribution operations.

“Over the past year we have been clear that Fletcher Building’s future lies in being a focused building products manufacturer and distributor.

“The sale of Fletcher Construction is a significant step forward in delivering that strategy, while continuing the work underway to simplify the portfolio, lower debt and improve shareholder returns.”

The sale covers Fletcher Construction Holdings and three New Zealand units: Higgins, Brian Perry Civil, and Fletcher Construction Major Projects. South Pacific operations are excluded and remain under separate review.

Fletcher Living, the company’s home-building business, is not included in the sale as it’s housed in a separate division.

Also excluded from the sale were the remaining responsibilities for its vertical construction projects, including the NZ International Convention Centre (NZICC) in Auckland, and historic civil construction projects beyond their defect liability periods.

The purchase price is subject to adjustments for working capital and net debt.

Fletcher said approximately 2300 employees will transfer with the division, providing continuity for customers, project partners and its teams across New Zealand. The South Pacific operations were being dealt with separately as part of the wider strategic review process, it added.

Vinci leads one of the three shortlisted construction consortia bidding to build the Warkworth to Te Hana expressway, for which construction was expected to begin at the end of 2026.

The firm’s subsidiary, HEB Construction, is also part of the consortium awarded the contract to build the Ōtaki to north of Levin (Ō2NL) highway, north of Wellington.

Spanish multi-national Acconcia leads another consortium bidding for the Warkworth to Te Hana expressway and was reported by The Australian’s Dataroom as being interested in purchasing Fletcher’s construction division.

• Stay ahead with the latest market moves, corporate updates, and economic insights by subscribing to our Business newsletter – your essential weekly round-up of all the business news you need.