Boskalis and HBG call off mergerNews // July 14, 2000
In February of this year Boskalis announced its intention to make an offer for the shares of HBG since Boskalis was convinced of the benefits of a combination of the two companies.
In acquiring HBG, Boskalis believed it would have been able to ensure the necessary business approach to realise the benefits of a merger. HBG declined this proposal.
After further discussions, and having established the strategic and financial objectives of the new company, both companies announced on 15 May their intention to merge on an equal basis.
Since then, says Boskalis, these objectives have been guiding principles during the discussions on the business plan.
Unfortunately, says Boskalis, it has become clear during these discussions that the two companies would not be able to reach agreement on an effective implementation of the strategy which would ensure that the new company reached its financial targets and fully realised the benefits of the merger.
In particular, agreement could not be reached in relation to HBG's construction business in Germany.
Therefore Boskalis has concluded that its intended objectives of a merger with HBG cannot be realised and has consequently decided to terminate the merger discussions.
Rob van Gelder, CEO of Boskalis said: "I very much regret that we have been unable to reach agreement. We continue to believe in the benefits of a merger with HBG. In particular these benefits are the creation of a strongly positioned international construction and dredging group, synergies in dredging and increased financial strength as a basis for further development and expansion of the construction business."
"Our strategy remains focused on growth and the creation of shareholder value", said Van Gelder. "As part of this strategy, Boskalis is continuing to pursue consolidation in the dredging industry and remains open to wider forms of co-operation that willcreate shareholder value".
"The fundamentals of the world dredging market are positive for the coming years. Our orderbook is very strong and for the year 2000 Boskalis expects a profit growth of approximately 15 per cent compared to 1999".
During the last six weeks Boskalis and HBG have carried out the mutual due diligence and also discussed the future of a joint company intensively.
Earlier, as the discussions ran into problems, the two companies announced that they would publish merger documents on somewhat later than expected, saying that due diligence and elaboration of the business plan would be completed by mid-July.