ACS takes majority control of Hochtief

The Spanish construction firm has completed its aim to achieve majority control of Germany’s Hochtief. At the end of last week, ACS was able to lay claim to 50.16% of Hochtief’s voting shares.

As anticipated, Spain’s ACS has achieved majority control of German rival Hochtief. By the end of last week, the firm had been able to amass 50.16 percent of Hochtief’s shares, taking it marginally above the 50 percent barrier.

The latest development brings to an end a takeover process that stems back to September last year when ACS launched a surprise offer for Hochtief by way of a filing to the Madrid Stock Exchange. Then a 29.9 percent shareholder, ACS’ offer valued the 70 percent of the target it did not already own at some €2.7 billion.

Hochtief fought a determined rearguard action against the bid, but its fate was effectively sealed in February this year when ACS announced it had gained more than 30 percent of Hochtief’s shares. Under German takeover rules, this cleared the way for ACS to acquire control of the firm on the open market without having to pay a premium.  Along the way, ACS had sweetened its offer from eight shares for every five Hochtief shares, to nine for five.

Last month, it was announced that ACS had taken control of Hochtief’s board of directors, doubling the number of its representatives on the German firm’s board at an annual shareholders meeting. The move was made easier by the voluntary withdrawal of four Hochtief board members seeking re-election prior to a shareholder vote.

The takeover allows ACS to take advantage of Hochtief’s strong balance sheet and roster of contracts, easing pressure on a debt pile thought to be around €8 billion. Moreover, it diversifies ACS away from the struggling Spanish construction market and towards the growing German market.