China State Construction Engineering Corp. (601668), the nation’s biggest builder by market value, intends to buy a U.S. construction company next year as it begins investing as much as $2 billion in the world’s largest economy.
The builder has shortlisted two potential takeover targets, including one with annual sales of about $1 billion, Vice President Chen Guocai said yesterday at a conference in Hong Kong. He declined to elaborate on the companies or on how much the builder may spend on its first U.S. acquisition.
China State, which renovated the Alexander Hamilton Bridge in New York, also plans private-public partnerships in the U.S. over the next five years to help pare its reliance on domestic and emerging markets. The company wants to boost the proportion of overseas sales earned in the U.S. to 15 percent from 5 percent within five years, he said.
The Beijing-based company, which is the parent of Hong Kong-listed developer China Overseas Land & Investment Ltd (688), will also seek to team up with a U.S. company on real-estate projects in the country, Chen said. He didn’t elaborate.
The builder closed down 1.9 percent to 3.06 yuan in Shanghai trading today. It’s declined 11 percent this year, compared with a 17 percent drop in the city’s benchmark Shanghai Stock Exchange Composite Index.
China State generated sales of 370.4 billion yuan last year, according to a company statement. About 15 percent of its current revenue came from overseas, Chen said.
The company boosted net profit 60 percent in the third quarter to 3.1 billion yuan, according to a statement to the Shanghai stock exchange.
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