SA, Australian consultancies merge to form ‘top 60’ global engineering force
Engineering|Expertise|Johannesburg|Africa|Africon|BKS|Connell Wagner Of Australia|Consulting|Eskom|Ninham Shand|PROJECT|Projects|Resources|South African Airways|Stewart Scott|Water|Africa|Europe|Singapore|South Africa|USD|Building|Energy|Mining|Professional Technical Services|Services|Transport|Environmental|Arnie Möhr|Connell Wagner|Gustav Rohde|Infrastructure|Jakes Gerwel|Nelson Mandela|Paul Hardy|Power|Water|Maryland|Engineering News-Record|Asia Pacific|Australasia|Middle East
© Reuse this
Two leading South African consulting engineering companies officially merged with one of Australasia’s largest infrastructure advisory companies on Monday to form a new global ‘top 60’ professional technical services group, with a combined revenue of $650-million.
The new company, called Aurecon, emerged as a result of a three-way merger of the capital and skills bases of Connell Wagner of Australia, with those of Africon and Ninham Shand, of South Africa, to form a new 6 700-employee entity, with 87 offices in 27 countries.
Aurecon would be headquartered in Singapore, and would seek to position itself as a large-project specialist across the infrastructure milieu, from transport to energy.
It saw particular opportunity in Africa’s power market and hoped to emerge as an “A-list” adviser to South Africa’s power utility, Eskom, which was pursuing a R385-billion, five-year expansion programme.
While the current global economic crisis had reduced market visibility in certain sectors, particularly in building and resources, the new company also saw potential upside as a result of the unprecedented response from governments, given that many of them had placed infrastructure at the centre of their economic stimulus proposals.
Aurecon would remain privately owned by its 600 invested partners and there was no intention to take the company public. But South Africa’s black economic-empowerment imperatives had reportedly been recognised and incorporated into the final ownership model.
On a pro forma basis, Connell Wagner contributed some 70% of the combined revenue to the merger entity, with the South African partners offering the balance, positioning the new entity in the top 60 of the yearly Engineering News-Record league table of international consulting engineering and architectural groups by turnover.
GERWEL TO CHAIR NEW GROUP
Its chairperson would be South Africa’s Prof Jakes Gerwel, who played the role of DG in former President Nelson Mandela’s government and who currently occupies several high-profile nonexecutive board positions, including the chairpersonship of South African Airways.
Paul Hardy, previously the CEO of Connell Wagner, would be the company’s inaugural global CEO, while Africon’s former CEO, Dr Gustav Rohde, had been appointed CEO responsible for Europe, the Middle East and Africa (AME). The previous MD of Ninham Shand, Arnie Möhr, would assume the role of deputy chairperson for the so-called AME zone.
The new entity would seek to participate in large-scale integrated infrastructure projects across the AME region, as well as the Asia Pacific.
Speaking at a launch function in Johannesburg, Hardy stressed that the consolidation, which had taken some 11-months to consummate, was a “merger of equals” and that it would enable the group to offer a broader range of expertise across continents.
Currently, the transport, building, mining and industry, and environmental market segments contributed about 20% each to the combined entity’s fee income, with the balance arising primarily from the power and water segments.
ORDER BOOK STILL STRONG
Hardy said that the global company still had a solid order backlog, while Rohde indicated that the order book for the AME region gave it comfort for the next 9-month to 12-month period.
Rohde indicated that Aurecon would be four times larger than its nearest South African rivals, which included firms such as Stewart Scott, BKS and Kwezi-V3.
Meanwhile, Hardy argued that the group’s newfound critical mass would position it to bid for far larger projects, including the power-related work in Africa that in recent times had gone to European and American consultancies.
Approval for the formation of Aurecon had been provided and is unopposed by the South African Competition Commission.
Hardy also stressed that no jobs would be shed as a direct result of the merger, stressing that there had been very few points of overlap between the three merging partners.
“This was a merger made in heaven,” Hardy quipped, arguing that no thought had been given to calling it off as a result of the global economic meltdown.
Edited by: Terence Creamer
© Reuse this
Comment Guidelines (150 word limit)
Other Electricity News
The Department of Energy (DoE) confirmed on Wednesday that the second nuclear vendor parade workshop, which took place at a venue in the Drakensberg, had been concluded with delegations from China, France, South Korea and the US. The first such workshop, which was...
Article contains comments
Eskom has asked its staff to consider voluntary retrenchment packages, a spokesman confirmed on Wednesday. "We can confirm that we have announced the process by which employees can apply for voluntary separation packages," spokesman Andrew Etzinger said.
Eskom capital division group executive Dan Marokane
Electricity utility Eskom says it and Anglo American have concluded a memorandum of understanding (MoU) that maps out the process to be followed to enable the parties to conclude a final coal-supply contract for the Kusile power station, which is currently being...
Article contains comments
Article contains comments
A Spoor & Fisher partner on Wednesday called on the Department of Trade and Industry (DTI) to finalise its proposed policy for Intellectual Property (IP). The policy, which had not been drafted in consultation with IP law experts, was published in September 2013,...
Auditor-General Kimi Makwetu
Auditor-General Kimi Makwetu has called on all government leaders to play a crucial role in ensuring that government departments and entities improve their audit outcomes. He has raised concerns over irregular expenditure, non-compliance with legislation, auditees...
The Somalia Stock Exchange expects seven companies in the telecoms, financial services and transport sectors to list their shares when the bourse is set up in 2015, its founder said. Somalia's economy is slowly recovering from more than two decades of conflict,...
Recent Research Reports
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
This Week's Magazine
JSE-listed real estate investment trust (REIT) Rebosis Property Fund achieved a distribution growth of 8.1% to 99.45c per linked unit in the financial year ended August 31, despite volatile market conditions.
The MOM incubator was designed to help babies in developing nations who were dying in conflict-struck nations or who do not receive hospital care
A low-cost, inflatable incubator won this year’s international James Dyson design award, which aims to encourage and inspire the next generation of design engineers.
The World Bank released its ‘Doing Business 2015: Going Beyond Efficiency’ report last month and ranked South Africa 43 out of 189 global economies for its ease of doing business, with Singapore topping the rankings.
Air Products South Africa officially launched its R300-million Eastern Cape air- separation unit (ASU), at its new manufacturing facility in the Coega Industrial Development Zone (IDZ), earlier this month. It is the second facility that Air Products launched in South...
BMW South Africa (SA) has signed a power purchasing agreement with energy company Bio2Watt. The offtake partnership will bring renewable energy to the carmaker’s Rosslyn plant, north of Pretoria.