Webuild acquires Clough assets to expand Australian presence

The A$17.6m (US$12m) acquisition comprises Clough’s Australian organisation and its share of the Snowy 2.0 and Inland Rail contracts (with the related workforce), where Clough is Webuild’s partner. It includes the option to buy other projects.

Webuild has until December 21 to agree the final contract with Clough’s administrators.

Webuild said the purchase would grow its footprint in Australia’s “thriving strategic market”.

Australian company Clough Group went into voluntary administration on December 5 after a takeover plan by Webuild fell through the same day. In a statement on its website, Clough announced its directors had appointed Deloitte as administrators.

Under the Future Generation joint venture, the two companies and Lane Construction are building Snowy 2.0, which will expand Australia’s pumped-hydro electricity generation. It links two existing dams through 27km of tunnels; also to be constructed is a new underground power station. The scheme includes a combined total of 40km of tunnels excavated.

Webuild said that in addition to obtaining the minority stakes in projects carried out with Clough in Australia, the transaction would allow Webuild to bolster its local organisation, engineering expertise and workforce, which was instrumental to the execution of its order backlog and commercial plan. 

Australia is Webuild’s second largest market after Italy, with an order backlog of €8.9bn (US$9.5bn), including projects for which Webuild is the preferred bidder, and a workforce of more than 1,800 people. Construction investments in the Australian market are expected to reach more than €300bn (US$319.5bn) in the 2022-2025 period.

Background

As already communicated to the market, on 8 November 2022, Webuild signed a sale and purchase agreement (“SPA”) with the South African company Murray & Roberts for the acquisition of 100% of Clough, subject to certain conditions precedent (including, in particular, the positive outcome of the due diligence and the provision of sufficient collateral for an interim loan to be provided by Webuild to Clough before completion of the acquisition). These conditions precedent were not met and, as a result, on 5 December 2022, Webuild and Murray & Roberts jointly agreed to terminate the SPA informing the market of their decision. Clough was thus placed in voluntary administration as its ability to continue as a going concern was dependent on third party funding which Murray & Roberts had stated it was unable to supply.

Clough, founded in Perth in 1919, is a major player in its sector and has a workforce of around 2,500 employees. It provides sustainable and innovative solutions in the design, construction and maintenance of plants and infrastructures. Its landmark projects include the first high-rise in Perth, and the first major underground freeway tunnel in Western Australia.