Bilfinger Berger to sell Australian business

After several months of speculation, Bilfinger Berger has formally announced plans to spin-off its Australian subsidiary. The company is preparing to sell shares in Bilfinger Berger Australia on the Australian Securities Exchange (ASX) via an initial public offering.

According to the parent company, Bilfinger Berger Australia (BBA) achieved revenues of about € 2.6 billion (US$ 3.6 billion) in 2009 with an earnings before interest and tax (EBIT) margin of about 3%, which is to say EBIT of about € 78 million (US$ 111 million).

The company includes well-known construction and infrastructure companies such as Abigroup and Baulderstone, both of which have long been active in Australia and New Zealand. BBA also has a services business, which focuses on engineering, asset management and maintenance work in the water, gas, electricity, mining, industrial and transport sectors.

The sale is part of Bilfinger Berger's strategy to reduce its exposure to the cyclical construction sector. The company says it plans to reduce revenues from construction from the current level of about € 6 billion (US$ 8.4 billion) per year to € 2 billion (US$ 2.8 billion) in the medium term and put a greater focus on its services businesses.

The timetable for the IPO is yet to be announced. It is also unclear whether Bilfinger Berger will sell all its shares in BBA - a statement from the Australian company citied Bilfinger Berger's intention to, "Reduce its ownership in the company."