Final board approvals are due on 19th March.
The acquisition marks marks the completion of the largest financial operation under Progetto Italia, Webuild’s initiative to consolidate the sector in Italy. Webuild’s initiative has been in response to the tremendous financial difficulties faced by many builders in Italy, including Astaldi. The aim is to create a bigger and stronger group ready to help Italy develop its infrastructure with European funds, and better compete abroad.
Progetto Italia is the plan by Webuild to prevent Italy’s infrastructure sector from collapsing. Nearly every other major civil engineering company in the country including Astaldi is on the verge of bankruptcy. The plan is helping safeguard up to 500,000 jobs in the sector, most of which are among small- and medium-sized businesses that make up the supply chain.
The company is consolidating the sector with a series of acquisitions – the latest and biggest being Astaldi, the second biggest in Italy after Salini Impregilo/Webuild - to create a larger group with the expertise, resources and scale to help the government revive the economy should a massive infrastructure investment plan be launched.
The deal entails splitting Astaldi into a so-called ‘good company’ and ‘bad company’. The ‘bad company’ – officially the ‘liquidation perimeter’ has all the debt and assets that Webuild does not want. This will be put into a foundation to let the remaining creditors do what they can to recover the debt owed to them. The spin-off is expected to be completed by July 2021. Astaldi will remain in control of liquidation perimeter created for Astaldi creditors.
Webuild will issue new shares, offering 203 for every 1,000 Astaldi shares still held by investors. To avoid diluting its existing shares, Webuild will issue warrants that will allow the existing shareholders to keep their stakes at the same level.
Astaldi’s stock will be delisted from the Borsa Italiana (Milan’s stock exchange).
Webuild said that both it and Astaldi are confident that the merger will bring significant operating, financial and economic benefits for the combined group. This would stem from, among other things: integrated management of common construction projects, implementation of a single commercial strategy, optimisation of centralised functions and centralised management of procurement, assets and working capital.
Progetto Italia has seen Webuild, formerly Salini Impregilo, acquire or take control of three smaller peers before Astaldi: Cossi Costruzioni, Seli Overseas and Grandi Lavori, which owns GLF Construction (USA).