AusRAIL, Market Sectors

New bidder enters John Holland race

<span class="" id="parent-fieldname-description"> A Hong Kong-listed construction business is the latest potential buyer for Leighton engineering business John Holland, according to reports. </span> <p>China Communications Construction Company Limited is the rumoured new entrant into the bidding war, according to several media sources.</p><p>Majority-owned by the Chinese government, China Communications, as it is most commonly known, specialises in road and port infrastructure it was formed in 2005 when China Harbour Engineering and China Road and Bridge Group merged.</p><p>Leighton is said to be asking for between $2bn and $3bn in total for the John Holland businesses, which initially were expected to attract interest primarily from European concerns such as Bouygues and Ferrovial.</p><p>As of a fortnight ago, South Korea’s Samsung was reported to be the leading contender, but the addition of China Communications further adds to the mix of potential suitors.</p><p>Samsung is currently leading the construction of Gina Rinehart’s Roy Hill mining project in the Pilbara region – a contract worth roughly $10bn.&nbsp</p><p>While Samsung is a massive global conglomerate, China Communications can rival it. The company has about $48bn worth of assets, and owns 34 subsidiaries stretched across multiple industries, including China’s biggest port builder, and the world’s biggest crane builder, ZPMC.</p><p>Leighton has been looking to sell John Holland since Spanish controller Hochtief launched a proportional takeover bid for the company, and said it was looking to pay down Leighton’s debt.</p><p>China Communications’ reported entrance into the bidding is a further step by China to invest in Australia.</p><p>Another significant and recent example of this was Chinese steelmaker Baosteel, which earlier this year bought Pilbara iron ore player Aquila Resources. Should Baosteel, and business partner Aurizon, develop Aquila’s WA iron ore assets, it could potentially run a significant export operation alongside those of Rio, BHP, FMG and new entrant Roy Hill.</p><p><em><strong>This article was originally published in Rail Express sister publication, the Australian Bulk Handling Review.</strong></em></p>

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