Murray & Roberts Holdings Ltd today announced a potential transaction, proposing to make an all share offer to acquire the entire issued share capital of Aveng Ltd, as well as to implement a solution to enable the early redemption of the Aveng convertible bonds.

Henry Laas, Group Chief Executive, Murray & Roberts comments: “The primary objective of the potential transaction is to establish a large multinational engineering and construction group with the scale necessary to compete more effectively in relevant markets. In this context, the Group believes that the strategic rationale for the potential combination of Murray & Roberts and Aveng is compelling for both Murray & Roberts and Aveng stakeholders. The boards of directors of Murray & Roberts and Aveng have agreed to enter into formal negotiations with regards to the potential transaction.”

Murray & Roberts is a multinational engineering and construction group with a focus on the natural resources market, specifically the mining, oil & gas and power & water sectors primarily in the Southern Africa, North America and Australasia regions.

Aveng’s Australian-based business, McConnell Dowell, is a major engineering, construction, and maintenance contractor, focused on the building, infrastructure and oil & gas sectors in Australia, New Zealand and Pacific Islands, Southeast Asia, and the Middle East. Aveng’s Mining business, Moolmans, is one of the largest surface mining contractors in Africa, involved in all aspects across the mining value chain.

The Group believes that the combination would give rise to the following benefits, amongst others, for both companies’ shareholders:

• Value creation by combining and integrating Aveng’s Moolmans and McConnell Dowell businesses with Murray & Roberts’ Underground Mining and Oil & Gas platforms;
• The creation of a large multinational engineering and construction business, with the accompanying benefits of additional scale in Murray & Roberts’ key markets;
• Enhanced credit profile for the combined business, assisting Aveng to shore up liquidity in the near term; and
• Allow time for the systematic sale of Aveng’s non-core assets (which all the businesses in Aveng other than Moolmans and McConnell Dowell) over time in order to maximise value for shareholders.

Laas continues: “Murray & Roberts has been evaluating the potential transaction since the fourth quarter of 2017. Discussions between Murray & Roberts and key shareholders of Aveng regarding the potential transaction commenced in December 2017. Evaluation of the potential transaction was therefore underway prior to the receipt by Murray & Roberts of a firm intention letter from ATON in March 2018 and the subsequent making of a general tender offer directly to Murray & Roberts shareholders by ATON in April 2018.”