Wednesday, September 2, 2009

Vinci to buy Cegelec

French giant Vinci is buying electric engineering company Cegelec from a Qatari state-owned investment company in an all-share ВЈ910m deal designed to create a major European player in the energy services sector.

In exchange for Cegelec, Qatari Diar Real Estate Investment Co., a unit of sovereign fund Qatar Investment Authority, will receive 31.5 million of Vinci's shares, making the Qatari company the largest shareholder after Vinci's employee savings fund, Vinci told Dow Jones.

Vinci's employees owned 8.2% of the company's capital as of Dec. 31, 2008, according to the company's Web site. Vinci had 515 million shares outstanding at June 30. As part of the deal, Qatari Diar is required to keep its stake in Vinci between 5% and 8% for three years.


Vinci to buy Cegelec


Employee representative bodies will be consulted on the deal, which also requires clearance from competition authorities. Vinci said Qatari Diar will appoint a director to Vinci's board, subject to approval from the company's shareholders.

Vinci in a statement said the acquisition of Cegelec would enable it to expand its energy division in a sector that is set to post consistent growth rates.

Paris-based Cegelec generates annual revenue of about ВЈ2.3bn. More than half its sales come from power production, transmission and distribution, but it also is active in climate control and mechanical engineering, automation, and instrumentation and control, among other things. It employs 27,000 people in about 30 countries.

Vinci's energy division, which provides power-supply networks and distribution services, in 2008 booked ВЈ3.5bn in revenue. It employs more than 33,000 workers in 21 countries.

The acquisition of Cegelec would accelerate Vinci's expansion into international markets by building up its operations in Europe and opening up emerging markets, the company said.

The transaction would be earnings-enhancing from 2010 and would be neutral on Vinci's debt ratios, as Vinci would take over only Cegelec's operating debt.

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