Aecon Group Agrees To Be Acquired By CCCI

October 26, 2017 | 76 Comments

[Updated with video] Aecon — the company involved in the Bermuda airport redevelopment — announced that they will be acquired by CCCC International Holding, a wholly-owned subsidiary of China Communications Construction Company.

Announcement

The announcement said, “Aecon Group Inc. and CCCC International Holding Limited [CCCI] today announced that they have entered into a definitive agreement under which CCCI will acquire all of the issued and outstanding common shares of Aecon for $20.37 per share in cash, representing an enterprise value of $1.51 billion.

“The purchase price represents a 42 per cent premium to Aecon’s unaffected share price on August 24, 2017[1] and a 9.2x EV/LTM EBITDA multiple. The board of directors of Aecon has unanimously recommended this transaction.”

“We believe this is a very positive outcome for Aecon and our key stakeholders,” said The Hon. Brian V. Tobin, P.C., O.C., Aecon’s Chairman. “This transaction is the result of an active and diligent sale process that has enabled us to select an outstanding partner and create significant shareholder value.”

“This is an excellent fit for both of our companies,” said Mr. Lu Jianzhong, President of CCCI. “Aecon has a strong management team and a very impressive track record that have made it a leading construction company in Canada and a pioneer in public private partnerships and concession operations. It will now gain access to significant capital, complementary infrastructure expertise and an international network to support its growth ambitions.”

Mr. Lu said: “The vision and leadership of John M. Beck, President and CEO, have built Aecon into the successful company it is today, a diversified business focused on innovation and customer service with a formidable management team. We will continue to rely on John’s experience and leadership as we together take Aecon to a new level.”

“This transaction creates significant and immediate value for Aecon shareholders, strengthens our competitive position in Canada and abroad with enhanced capabilities and financial resources, and provides expanded opportunities for our people,” said Mr. Beck.

“We look forward to partnering with a global leader while retaining Aecon’s Canadian headquarters and values. I’m excited and proud to be part of this new chapter for Aecon and for Canada. And I am personally committed to working with the Aecon management team and CCCI on CEO succession planning which began last year, prior to our exploring the sale of the company.”

Subsidiary of China Communications Construction Company

CCCI is the overseas investment and financing arm and a wholly-owned subsidiary of China Communications Construction Company Limited [CCCC], one of the world’s largest engineering and construction groups.

CCCC is a public company listed on both the Hong Kong Stock Exchange and Shanghai Stock Exchange.

“Sale will have no impact on the day-to-day of the construction of the new airport terminal”

Steve Nackan, President, Aecon Concessions and Chairman, Skyport, said, “Following the announcement to enter into an agreement with CCCC International Holding Limited [CCCI], a wholly owned subsidiary of China Communications Construction Co., Limited, we wish to confirm our steadfast commitment to Bermuda and the Airport Redevelopment Project. It is business as usual at Aecon and on the Bermuda airport terminal construction project.

“This agreement will create value for our shareholders and enhance Aecon’s capabilities and growth potential, something that we’re very excited about. By joining the third largest construction company in the world, Aecon and Skyport will ultimately benefit from enhanced capabilities and financial resources. However, Aecon will remain a Canadian company.

“This sale will have no impact on the day-to-day of the construction of the new airport terminal or Skyport. The Aecon management team and friendly Bermudian Skyport employees will remain in place and the new airport will be completed on-time and on-budget with the guarantee of the Canadian Commercial Corporation. We look forward to delivering a state-of-the-art terminal in 2020.”

The sale has just been announced this morning, and we will update as able.

Update 7.27am: The full announcement follows below [PDF here]:

Update 3.05pm: In response to our queries, the Premier’s office said, “Change in ownership at Aecon will not have an impact on the construction of a new terminal at the airport. The review of the former Government’s privatisation agreement with Aecon is continuing and our aim remains to ensure that Bermuda’s taxpayers get a better deal.”

The Premier also stated this when asked about the sale at a press conference held today about the Bermuda First group, with his reply shown in the video extract below

Update: 7.55pm: Former Premier Michael Dunkley said, “The sale of Aecon to a Chinese company should have no impact on the agreement signed.

“As outlined by AECON there will be no change to their business, operations, management or staff – including Skyport. Further, there will be no change in CCC’s role in terms of guarantee of construction completion timing, budget or quality.

“The acquirer is publicly traded in HK and Shanghai and is the 3rd largest construction group Worldwide which should benefit all AECON clients.”

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  1. Topaz says:

    Open quote

    “We believe this is a very positive outcome for Aecon and our key stakeholders,” said The Hon. Brian V. Tobin, P.C., O.C., Aecon’s Chairman

    “This is an excellent fit for both of our companies,” said Mr. Lu Jianzhong, President of CCCI.

    End quote

    WHAT DOES THIS MEAN FOR BERMUDA? and yes, I am shouting!!

    • Double S says:

      PRETTY SURE IT STATES THE BELOW IN THE ABOVE ARTICLE:

      “Sale will have no impact on the day-to-day of the construction of the new airport terminal”

      “This sale will have no impact on the day-to-day of the construction of the new airport terminal or Skyport. The Aecon management team and friendly Bermudian Skyport employees will remain in place and the new airport will be completed on-time and on-budget with the guarantee of the Canadian Commercial Corporation. We look forward to delivering a state-of-the-art terminal in 2020.”

      • Sigh says:

        That’s on the day to day construction….what about the other terms in the contract….

        • Politricks says:

          The contract is legally binding with no clause that says the tems can be amended in the event of an ownership change.

          • Sigh says:

            So you’ve seen the ENTIRE contract???

            • Karen says:

              IMMIGRATION WILL NOT BE ABLE TO PROTECT THE JOBS WHEN THEY BRING THE OVERSEAS WORKERS IN FROM CHINA AND CANADA TO PROVIDE CHEAP LABOR. BERMUDA HAS NO SAY AND THANKS TO THE OBA/UBPerrrs WE DON’T OWN THE AIRPORT.

              OBA YOU SUCK BIG TIME AFTER THIS BUNCH OF MORONS!!!!!!!!!!!!! ONLY A CLOWN WOULD STAY IN THAT PARTY AFTER THIS.

              • Truthertz says:

                So you think that the PLP Department of Immigration is just going to approve work permits whole sale?

                • The Original Truth™ says:

                  Under DREB they had the most work permits approved ever in the history of Bermuda. The only way I would put work permits whole sale passed PLP is if the premier is far removed from DREB’s hypocrisies. PLP brought approved these contracts regardless of the term limits, closed and restricted positions they put in place. It’s all slight of hand with politics and if you are distracted by zealous to a political party you will think they are really magic.

              • Double S says:

                Damn the PLP have you guys delirious and hilarious all at the same time.

                The world is coming to an end because Bermuda is having a new airport built! Wahhhhhhhhhhhh

              • Zevon says:

                You know, delusional paranoia is widely recognised and can be treated.

              • bdaboy says:

                “OBA YOU SUCK BIG TIME AFTER THIS BUNCH OF MORONS”

                …she spewed hysterically while spittle frothed out of her angry facehole.

              • Onion says:

                You’re making things up to justify a hate of the OBA.

                It’s sad and pathetic.

              • Passenger says:

                Most countries do not own their airports.
                Good luck trying to make a profit on a dozen flights a day with most people turning up just before the flights leave so no time to spend on shops in departure lounge.
                It is not like it is Gatwick with thousands of people hanging around for hours trying to spend money.

            • Politricks says:

              It was tabled ages ago by the previous Government.

              So do your research and highlight where it states that the contract can be amended if Aecon is sold.

              I double dare you.

          • The Original Truth™ says:

            The contract is not legally binding by jurisdictional laws. PLP could just change the business ownership laws in the act and will be able to break the contract that way. The problem Bermuda will face is who in Bermuda would be able to buy out Aecon as that part would be legally binding. I think I have a good idea of who out of the PLP ministers would personally profit from this type of law change.

      • The Original Truth™ says:

        Both the statements from Aecon are BS. I had thought Aecon had a good deal for Bermuda until this happened. Stakeholders were hoping ACS Group would buy Aecon not CCCI. CCCI’s revenue is 54.8 billion USD and ACS is 34.06 billion EUR. ACS stock currently trade for €33.02 and CCCI HK$9.84 much lower than Aecon’s 16.52 share price. Not a good deal for stakeholders.

        For Bermuda CCCI has a different set of values than Aecon and will not treat their employees the same and will be less likely to hire locals over cheap labor foreigners for jobs. OBA never made sure that fair hiring practice were in the agreement. Also CCCI will most likely use cheaper quality materials to build the Airport than Aecon would have.

        I am very disappointed with Aecon. This deal is like the ones the Harper Government made that sold out Canada.

        • Politricks says:

          You must be an Aecon/CCCI insider to know that the Aecon statements are BS.

          “will be less likely to hire locals over cheap labor foreigners for jobs.”

          Thank goodness we have an immigration department then, huh?

          • The Original Truth™ says:

            You must be living under a rock if you think that immigration in Bermuda actually do their job. Besides the minister of immigration has the final say and last time PLP were in they let the highest number of permits EVER to pass. This was all during the time of the IB exodus. Who do you think all those permits were for if IB was leaving?

            You don’t need to be an insider to look at Aecon and CCCI fundamentals to see that this was a deal to pass off their AR that they’ve had a hard time collecting onto another company at a slight profit.

            • WELLLLLLLLL says:

              Well good thing there is a clause in the DAMN contract to ensure minimum Bermudians to be employed at all times and that there is a clause regarding the training for Bermudians.

              Too bad so busy whining you haven’t bothered reading the actual articles regarding the reviews of the airport contract.

              and regardless of what Premier Burt says it is not privatization of the airport because at no time do they take ownership of the airport or the property.

              Repeating it over and over will not make it true; Except of course in the minds of all his sheeple.

        • bdaboy says:

          “I am very disappointed with Aecon.”

          …and I’m sure AECON is very upset.

          • The Original Truth™ says:

            Of course we know that Aecon could give a rat’s a.. about me, you or Bermuda but it still doesn’t stop me from caring. Everyone in Bermuda should care as this deal will affect Bermuda on a whole.

            • bdaboy says:

              ” Everyone in Bermuda should care as this deal will affect Bermuda on a whole.”

              Only half the island cares that the plp will run it into the ground again, the other half wants to see Bermuda fail, and they’re the government now….you seem to love stupidity.
              Have a blissful existence.

              • The Original Truth™ says:

                “you seem to love stupidity.”

                I guess I do if I keep reading your aimless replies.

    • Zevon says:

      It doesn’t change anything at all. A contract is a contract.

      • Sure Thing says:

        Sure it is. Just like the Waterfront contract was a binding one. Oh wait….. But surely China is more ethical than the OBA. Oh wait….

      • bdaboy says:

        “It doesn’t change anything at all. A contract is a contract.”

        Except in Bermuda, where contracts and agreements are ignored. Friends and family of the plp.

        • The Original Truth™ says:

          Not just in Bermuda.

          Ecuador broke their contract with Aecon on the Quito Airport concessions by simply amending their ownership laws so that foreign companies operating in their country could not own 100% of the company. Aecon had to find an Ecuadorian buyer and sold half of the company for far less than it’s worth.

          • bdaboy says:

            “Ecuador broke their contract with Aecon…”

            You should have read some of the other links when you googled that, you don’t have the whole story…embarrassing isn’t it?

            • The Original Truth™ says:

              Which links are those? The load of investor relations links Aecon floods the net with.

              What about the one from the TSX Newswire? I bet the Ecuadorians loved the fee increases, delays and increased costs associated with the slowing of construction.

              “Corporacion Quiport S.A (“Quiport”), which holds concession rights to both the existing Quito Airport and the new airport currently under construction, will, in addition to the currently contracted concession fees, pay the Municipality of Quito 18% of Quiport’s net income plus $500 thousand per year. This change will effectively reduce the earnings Aecon reports from the project by approximately 18% and increase the Municipality’s effective economic interest to the equivalent of 26%.

              A schedule of fee increases was established for “Regulated” fees charged by Quiport at the airports (including airline landing fees and passenger departure fees). The schedule, which respects the maximums established in the original concession agreements, provides Quiport with increased certainty regarding the revenues expected to be derived from the concession, and does not limit Quiport’s ability to charge market fees for “Non-regulated” items such as duty free and car rental concessions, parking, food services etc.

              It was agreed that a new completion date and a new construction price would be set for the project, reflecting the delays and increased costs associated with the slowing of construction activity following the Court ruling earlier this year.

              A deadline of January 29, 2010 was set for receipt of Court approval and finalization of all conditions and deliverables relating to the settlement (including the construction issues noted above).”

    • Blind Sheep says:

      Be ready to see an influx of Chinese workers at that airport

    • O.B.A. either got PLAYED, or there is a vetted interest.
      Or both.

      • bdaboy says:

        “O.B.A. either got PLAYED, or there is a vetted interest.”

        You got played, oj…by the people who you thought would educate you.
        Look up the meaning of words before you use them, that way you wouldn’t look so stupid EVERY TIME YOU POST.

  2. Joe says:

    O gosh.. watch bermudians blow this wayyyyy out of proportion!

    • Double S says:

      Simply because many won’t understand…

      • Double S says:

        Based on the comments thus far It appears my ‘many won’t understand’ comment is spot on.

        A signed and legally binding contract is just that. The terms cannot be changed unilaterally by any party involved.

        Sigh. The education system should be the main focus as evidenced by the ignorance of the comments.

    • Sima says:

      If you’re not a Bermudian your fruitless comment needs to be dismissed!

      This is what you people voted for now deal with it… you got playes

      • bdaboy says:

        “If you’re not a Bermudian your fruitless comment needs to be dismissed!”

        …and if you voted plp, you should sit down and hush…keep your stupidity to yourself.

      • Sure Thing says:

        You people?!? Serious?

      • Sure Thing says:

        Plus no one voted for the airport deal. Learn the facts!

  3. Alvin Williams says:

    So much for the brilliance the finance minister of the former one term OBA government. I bet Aecon did not tell him what they really intended to do with the sweet plum of the development of Bermuda airport and what it would do for the Canadians and the Chinese. of course with respect to the interests of Bermuda? We might as well negotiated with the Chinese directly and maybe we could have got them to build the airport as well as a new causeway.

    • ha says:

      Do you actually believe what you type?

      • Blind Sheep says:

        Most likely yes

        • Ringmaster says:

          Alvin is right. Had we dealt with the Chinese directly we would have a new airport and causeway in 18 months, not 36. They would have brought in their own people and finished well within budget and time. If only. However, the contract called for a minimum number of Bermudians at large cost, and delay.

    • The real Terry says:

      Alvin I think most people would take Standard & Poors word that Minister Richards was doing the right thing rather than the assertion by someone like yourself who as I understand has no financial background at all.

  4. Gloria says:

    I hear it lound and clear. They said it’s good for Canada and China NOT seeing anything about it being good for Bermuda.

    • Zevon says:

      It makes no difference to Bermuda. The airport contract is a miniscule part of Aecon. Get over yourself.

    • So Tired says:

      Thought the same thing

      • Truthertz says:

        They didn’t the say anything about how this will benefit the numerous projects that Aecon is involved in around the world. Despite our arrogance the Bermuda airport project is just another small piece of the very large pie that Aecon and CCCI are working on.

  5. bdaboy says:

    “former one term OBA government.”

    LOL…because life on earth only started 5 years ago?

    Your blinding hatred for some Bermudians clouds your sensibility and makes you look like a moron.

  6. bdaboy says:

    ” They said it’s good for Canada and China NOT seeing anything about it being good for Bermuda.”

    your inability to comprehend the written word is, sadly, your problem.

  7. Kathy says:

    Surely, these talks were in the works long before the Airport Contract was in place. These acquisitions don’t happen overnight. China is taking over the world…even Bermuda!

    • Baileys Bay says:

      Been going on since this past July August when Aecon announced they had hired advisers to assist them to identify options. That’s code for “we’re for sale, here’s who to call if interested”. These deals do get done in a hurry once basics are agreed, there are many good reasons why but 3-6 months for a deal between unregulated public companies isn’t unusual…just because it takes us 2 years to build a bus lay-by doesn’t mean the rest of the world can’t move faster!

  8. cant wait says:

    Cha plp got Aecon to sell already! Musta gottum nervous when they started reviewing the contract.

  9. seriously? says:

    I seriously doubt the Bermuda airport project is big or important enough for the Chinese to even care about changing the contract. This airport redevelopment was the best thing we could do seeing as all our money disappeared prior to the OBA. Can’t understand why everyone is getting so upset. We need a new airport and this way we don’t have to pay for it. Bermuda is really not that important in the global scheme of things, although you’d think the whole world revolves around us by some of the comments on here.

    • Blind Sheep says:

      And this is the issue with the current system. Both sides are screaming with nothing backing it. One is saying it a good deal for Bermuda with out backing it, The other is saying its a bad deal and Bermuda is loosing out.

      So me the cost difference with the tendering process and keeping operational control over the airport vs PPP over the same 30 projections and lets move on.

    • Portia says:

      “Can’t understand why everyone is getting so upset. We need a new airport and this way we don’t have to pay for it.”

      So we’re giving away millions of dollars in airport revenue over the next 30 years and you think we aren’t paying it?

      • Toodle-oo says:

        *So we’re giving away millions of dollars in airport revenue over the next 30 years and you think we aren’t paying it? *

        If they weren’t collecting operating revenue what is the alternate way of paying for it ?

        There’s only one correct answer by the way and it negates your beliefs.

      • Build a Better Bermuda says:

        “So we’re giving away millions of dollars in airport revenue over the next 30 years and you think we aren’t paying it?”

        This statement alone is derived from so much blind drivel, it has been one of the most used PLP lies for the last several years. Guess what, we need to build a new airport; guess what, it has to be paid from somewhere; guess what, the existing airport isn’t making anywhere near the money a new one can make due to high capital expenditures on out of date and mismatched equipment upkeep; guess what, no matter who builds it and how, any airport profits would be going to overseas creditors to pay the construction bill; guess what, the only plan the PLP came up with to date would have cost Bermudians hundreds of millions more in cost overruns and interest against the government books; guess what, your argument has been debunked by far better financial experts than your Burt mathematics.

      • Double S says:

        Bet you support the hospital P3 development though for some reason, huh?

  10. the rubbish rubbisher ! says:

    So the CHINESE are now building our airport…..lol…哦,世界即将结束

  11. puzzled says:

    Rubbish.
    The Chinese build islands larger than Bermuda.

    Bermuda fools and follies.

  12. bdaboy says:

    “Can’t understand why everyone is getting so upset. We need a new airport and this way we don’t have to pay for it”

    Some people don’t think we need a new airport. Some people don’t understand that we only have 3 more years to build an airport that conforms to international security standards. These same people don’t understand that other countries, like their beloved USA, could refuse to accept flights from Bermuda. These people, who voted for the plp, would not be able to go to Atlanta, twice a year, for shopping.

  13. Baileys Bay says:

    Aecon is and will continue to be a Canadian company and will continue to build our new airport. The Canadian Commercial Corporation will still guarantee on time, on spec and on budget completion and the Aecon management team and friendly Skyport people will remain as is. Bermuda contractors and their employees will continue to be hired by Aecon and our Department of Immigration has not somehow been superseded by a commercial transaction between two large construction companies, one in Canada and the other in China. Nothing has changed except for Aecon shareholders who’ve exchanged shares for cash. Nothing to do with and no impact to Bermuda at all. The world will continue to revolve and the sun will come up tomorrow just the same way it always does.

  14. Lualaba says:

    All I’m going to say is look into CCCI’s dealings in the Bahamas in 2014 A subsidy of theirs China Harbour Engineering Co. They were also involved in the proposed replacement of the BVI airport at Beef Island..

    • S Rego, MA (Dist), BA (Hons Merit) says:

      @Lualaba agreed. This is the first comment I’ve seen that actually makes sense. The sale is more than just a sale – from a globalisation perspective it’s part of a much, MUCH bigger picture, and people need to start looking above the clouds.

      Just look at Bermuda’s history and its strategic positioning in the Atlantic. If you know politics, finance, and trade, you’ll know what I’m getting at.

      What bothers me as a Bermudian is, the then possibility of this type of thing happening (the company being acquired by someone else) has actually come to fruition.

      Aecon may have several projects going on making Bermuda seem insignificant, but any businessman who is investing his money (especially in the billions) looks THOROUGHLY at what he is buying – in this case, that includes ALL the projects Aecon has its hand in.

      If variables like this are able to come into play, it’s time for Bermudians to start paying attention to the bigger possibilities that can occur, based on what appears to be seemingly minor and insignificant decisions.

      A small crack in the damn wall still holds the possibility of the dam breaking.

  15. Up D hill says:

    Lets just sit and watch the ministers try and get over on the Chinese. This should be fun!!

  16. Coffee says:

    So , a United States of America immigration preclearence at a Bermuda airport run by the Chinese … Hmmmm …

    Did the UBP/OBA talk to the Department of State about that scenario ?

    Good luck Bermuda , I think that privilege will soon disappear faster than Bob Richards did after that walloping he took from Chris Famous !

    • Zevon says:

      Ignorant comment. Childish and pathetic.

      • Coffee says:

        But wholly realistic … From a Homeland Security angle … And guess what ? You , Bob , David or I could possibly have forfited that pricless privilege for the sake of a worthless Chinese owned Canadian operated terminal

        • Zevon says:

          It’s not “realistic”. The US preclearance is run by the US. When the new airport is built it was never going to be run by Canada, China, Bermuda, or anyone else.
          You have no legitimate point, so you make up fake news. Pathetic.

  17. Joe Bloggs says:

    New signs like “Exit 出口” ?

  18. Coffee says:

    Will Bermudians have to pay in Canadian or Chinese currency when leaving the Island ?

  19. bdaboy says:

    “Will Bermudians have to pay in Canadian or Chinese currency when leaving the Island ?”

    They will have to use fake money…to match your fake news, fake intelligence and fake sense of humour.

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