The merger between Europe’s largest dredging contractor, Boskalis, and Hollandsche Beton Groep (HBG) has collapsed due to disagreements over the future of HBG’s loss-making German subsidiary, Wayss and Freytag. Acquired by HBG in 1996, the company posted a loss of around £50M in the last financial year.
HBG, has reorganised and restructured the company and, although a loss is forecast for the current financial year, believes that the troubled subsidiary is on line for a break-even figure in 2001, followed by a move into profit. In particular, Wayss and Freytag is thought by some to be in a position to benefit from the building of new football stadia following the decision that Germany will host the World Cup in 2006.
Parent HBG has considerable expertise in building state-of-the-art facilities and a number of these will be required by 2006, since the majority of Germany’s football stadia do not conform to the latest FIFA regulations.
The collapse of the merger talks caused an immediate drop in the value of HBG shares while those of Boskalis rose by 18%. The dredging contractor said that it now intended to look for alliances elsewhere.
According to reports, analysts consider that HGB’s own dredging subsidiary, HAM, could be isolated in a fast-consolidating industry where contracts are likely to go to the largest players.
Other companies which form part of the Dutch contractor’s portfolio include Nuttall and builder Higgs & Hill.
