Fletcher Building has agreed to sell its construction division to French-based international infrastructure group Vinci Construction for $315.6 million, as the company sharpens its focus on building products and reduces debt.
The transaction involves the sale of Fletcher Construction Holdings and its three New Zealand business units: Higgins, Brian Perry Civil, and Fletcher Construction Major Projects.
The NZX-listed Fletcher Building says the deal includes a potential increase of up to $18.5 million, depending on the outcome of a small number of contracts currently under negotiation, taking the headline enterprise value to as much as $334.1 million.
Higgins is an integrated national civil construction business delivering major infrastructure, road maintenance and roading products. Brian Perry Civil specialises in civil works, structures and foundations, while Fletcher Construction Major Projects delivers large-scale infrastructure in partnership with public and private sector clients.
The purchase price will be subject to customary adjustments for working capital and net debt.
Fletcher Construction’s South Pacific operations are excluded from the sale and will be dealt with separately as part of the group’s wider strategic review.
Fletcher Building will also retain responsibility for completed legacy vertical construction projects, including the New Zealand International Convention Centre, and certain historic civil construction projects beyond their defect liability periods.
Completion of the transaction is subject to regulatory approvals, including from the Overseas Investment Office and, if required, the Commerce Commission, as well as counterparty consents under key contracts. Fletcher Building expects these conditions to be met by the first quarter of the 2027 financial year, with completion before the end of calendar 2026.
The group says it expects to recognise additional provisions of between $55 million and $65 million for probable future claims relating to legacy construction contracts retained following the divestment.
The provision does not include any allowance for potential litigation associated with the New Zealand International Convention Centre project.
Following completion, about 2300 Fletcher Construction employees will transfer with the business to Vinci.
Managing director and chief executive Andrew Reding says the sale is a key step in executing the group’s strategy.
“Over the past year we have been clear that Fletcher Building’s future lies in being a focused building products manufacturer and distributor, supported by a strong balance sheet and disciplined capital allocation.
“The sale of Fletcher Construction is a significant step forward in delivering that strategy, while continuing the work underway to simplify the portfolio, lower debt and improve shareholder returns,” Reding says.
Reding says Fletcher Construction has a long history delivering major projects across New Zealand, but the business no longer fits the group’s future direction.
“Fletcher Construction is a great business with excellent people, deep technical capability and a proud legacy as one of New Zealand’s most iconic construction companies.
“Over many decades it has delivered some of the country’s most complex and important infrastructure projects, and that track record is a testament to the quality of its teams and leadership,” he says.
“However, following our strategic review in 2025, we received strong inbound interest for the construction business.”
He says the sale to Vinci Construction is in the best interests of shareholders and the sector.
“Having undertaken extensive market soundings, we are confident that the sale to Vinci is the right transaction for our shareholders, Fletcher Construction and the broader New Zealand construction industry.
“Vinci knows Fletcher Construction well and has a deep commitment to New Zealand and the country’s infrastructure pipeline.
“That makes it an excellent long-term owner for the business and its people, customers and partners. I believe Fletcher Construction will find a strong home with Vinci, whose strengths are well aligned with the business, and which has a proven track record of successfully delivering major infrastructure projects globally,” Reding says.
Vinci Construction is a global leader in construction and part of the wider Vinci Group with a presence in about 100 countries through 1300 business units and over 117,000 employees.
