Fletcher Building (ASX: FBU) has announced a binding agreement to sell its Construction Division to VINCI Construction (VINCI), a major international construction group, for $315.6 million. Fletcher Building is a manufacturer and distributor of building products, with operations primarily in Australia and New Zealand. The company employs thousands of staff and has a long history in the Australasian construction industry.
The purchase price may increase by up to $18.5 million, contingent on the final outcome of ongoing negotiations for a small number of key contracts, potentially bringing the total enterprise value to $334.1 million. Managing Director and CEO Andrew Reding stated that the sale aligns with Fletcher Building’s strategic focus on becoming a building products manufacturer and distributor, supported by a strong balance sheet. The sale is expected to streamline the portfolio, reduce debt, and improve shareholder returns.
The transaction includes the sale of Fletcher Construction Holdings and its three New Zealand business units: Higgins, Brian Perry Civil, and Fletcher Construction Major Projects. The South Pacific operations of Fletcher Construction are excluded from the deal and will be addressed separately. Fletcher Building will retain responsibility for legacy vertical construction projects, including the New Zealand International Convention Centre (NZICC), as well as certain historical civil construction projects.
The completion of the transaction is subject to regulatory approvals, counterparty consent under key contracts, and the restructuring of the South Pacific operations. The group expects the deal to be finalised before the end of calendar 2026. Following completion, approximately 2,300 Fletcher Construction employees will transfer to VINCI. The group anticipates recognising additional provisions of between ~$55 million to $65 million for probable future claims related to legacy construction contracts retained following the divestment.
