M&R Clough acquisition implemented
South African construction group Murray & Roberts (M&R) on Wednesday said the proposed acquisition of the outstanding shares in Australian company Clough had been implemented, making Clough a wholly owned subsidiary of the group.
M&R, which previously already held a 61.6% stake in Clough, in August made an offer to acquire the remaining shares in the Australian company for A$1.46 a share. The offer comprised a cash payment of A$1.32 a share and a dividend of A$0.14.
Following the acquisition, Clough had also applied to be removed from the official list of the ASX.
In August, M&R CEO Henry Laas said the group was keen to pursue oil and gas prospects in Mozambique, Tanzania and South Africa and that the acquisition of Clough would strengthen its hand in what was poised to be a high-growth sector.
Clough had already become a major part of the group’s earnings and order book, with its Australasian construction, as well as its oil and gas interests, making up R20.6-billion of an overall order book of R45.7-billion.
M&R expected its international operating platform, which included Clough’s business and underground mining activities in North America, would soon contribute 75% of earnings before interest and tax.
The remaining 25% would be derived from its South African, African and Middle Eastern businesses.
Laas said the deal would offer M&R better exposure to market sectors that offered long-term growth potential and that the execution risks were “low”, as it already had a good understanding of the business.
However, he acknowledged that the Australian liquefied natural gas (LNG) investment cycle was likely to taper in the coming two years, but said Clough was positioning itself to play a significant role in the maintenance of these LNG assets.
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