{"id":244234,"date":"2026-01-21T11:10:23","date_gmt":"2026-01-21T11:10:23","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/244234\/"},"modified":"2026-01-21T11:10:23","modified_gmt":"2026-01-21T11:10:23","slug":"why-fletcher-building-is-selling-its-construction-division-to-french-giant-vinci","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/244234\/","title":{"rendered":"Why Fletcher Building is selling its construction division to French giant Vinci"},"content":{"rendered":"

\"Fletcher<\/p>\n

\nPhoto: Fletcher Building\n<\/p>\n

Six months after announcing a potential sale was on the cards, Fletcher Building revealed on Tuesday that a binding agreement had been reached, and its construction division would be sold to French giant Vinci.<\/p>\n

The market reaction was generally positive – for years the construction division had been problematic for Fletcher Building<\/a>, and the source of some high-profile cost blowouts and delays.<\/p>\n

Fletcher Building is set to receive $316 million from the sale (potentially rising to $334m), which includes Brian Perry Civil, Higgins and Fletcher Construction Major Projects, but excludes its South Pacific operations.<\/p>\n

Generate Wealth investment specialist Greg Smith said the sale was “broadly positive”.<\/p>\n

“They’re exiting a structurally low-margin, high-risk construction business that you could arguably say has destroyed value for more than a decade,” he said.<\/p>\n

“It’s really only consumed capital over the past 10-15 years, it’s absorbed cash, and it’s generated write-downs and volatility.”<\/p>\n

Smith said the construction arm delivered some large projects that had left some “nasty surprises”<\/a>, notably the NZ International Convention Centre.<\/p>\n

In a note, Forsyth Barr senior analyst Rohan Koreman-Smith acknowledged the construction division’s troubles, and also viewed the sale as a positive.<\/p>\n

“The construction division has been a significant drag of FBU’s cash flow, with major cost overruns in several key projects (including the NZ International Convention Centre) resulting in $1.6bn of significant items over the last decade,” he said.<\/p>\n

Craigs Investment Partners investment director Mark Lister said Fletcher was receiving a “good price” for the business.<\/p>\n

“More importantly, it’s the right strategic move,” he said. “It will help the company pay down debt and that needs to come down a little bit further.”<\/p>\n

Lister said it moved Fletcher a step closer to resuming dividend payments, while sorting out its balance sheet.<\/p>\n

The industry impact<\/p>\n

Smith said the arrival of Vinci would mean a new player with the ability to scale in the New Zealand construction market.<\/p>\n

“[They are] possibly one that has a more sophisticated approach to pricing projects and pricing risks, and, of course, deeper pockets as well,” he said.<\/p>\n

“They will be a very attractive bidder potentially for a number of projects that many players would be interested in bidding for … including the Warkworth to Te Hana expressway.”<\/p>\n

Lister did not think there would be any obvious impact on the industry.<\/p>\n

“It’s not going to be a negative, we don’t lose this player, it will just change ownership,” he said.<\/p>\n

“[Vinci is] a very global business … and it’s listed on the Paris stock exchange, so this is a big company that knows what they’re doing.”<\/p>\n

Sign up for Ng\u0101 Pitopito K\u014drero<\/a>, a daily newsletter curated by our editors and delivered straight to your inbox every weekday.<\/p>\n","protected":false},"excerpt":{"rendered":"Photo: Fletcher Building Six months after announcing a potential sale was on the cards, Fletcher Building revealed on…\n","protected":false},"author":2,"featured_media":244235,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[48,138,47,111,43,139,69,49,46,44,45],"class_list":{"0":"post-244234","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-audio","9":"tag-business","10":"tag-current-affairs","11":"tag-new-zealand","12":"tag-news","13":"tag-newzealand","14":"tag-nz","15":"tag-podcasts","16":"tag-public-radio","17":"tag-radio-new-zealand","18":"tag-rnz"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/244234","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=244234"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/244234\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/244235"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=244234"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=244234"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=244234"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}