Bilfinger to Sell Civil Engineering AssetsAlex Webb
Bilfinger SE, once Germany’s second-biggest builder, said it will largely exit that business by selling most of its civil engineering assets, leaving more of that field for Hochtief AG.
Units that generated about 800 million euros ($1.1 million) in revenue last year will be sold, the Mannheim, Germany-based company said today in a statement. Bilfinger will retain wind turbine, transmission line and steel construction units, which have combined revenue of about 200 million euros, as well as its German building division.
A reduction in the civil-engineering business was necessary “to continuously improve the risk profile of the group,” Chief Executive Officer Roland Koch said in the statement. “In civil engineering on an international scale, a certain critical mass is a decisive success factor.”
Koch has been transforming the 134-year-old company from a builder into an engineering services specialist since taking the top job in 2011, and has made at least 13 acquisitions, according to data compiled by Bloomberg. Hochtief, Germany’s biggest builder, has meanwhile been reversing a push into services to concentrate on engineering projects.
Bilfinger shares jumped as much as 5.6 percent in Frankfurt, the biggest advance in almost a year. The stock was up 4 percent at 87.40 euros as of 11:13 a.m., giving the company a market value of about 4 billion euros.
Bilfinger also said today that first-quarter orders were at a similar level to those a year earlier, while a 1 percent increase in output volume to 1.9 billion euros was largely due to acquisitions. It reiterated a forecast for organic growth in all business segments this year.