Strabag to enter Australian market through acquisition

Strabag is planning to expand to Australia with the acquisition of Georgiou Group, a specialist in road and infrastructure construction. Image: Strabag

The two companies have agreed on the key terms of a purchase and the signing of the final purchase agreement is expected to take place before the end of the year. Approval from Australia’s Foreign Investment Review Board (FIRB) and the Strabag Supervisory Board is still pending.

The Perth-based company has 875 employees, generates an annual output of around A$1.3 billion (US$845 million). The purchase price, which has yet to be finalised, will be in the low three-digit million euro range. The transaction will be financed through existing cash and cash equivalents.

“Our core markets in Europe are proving to be a stable source of earnings despite the currently difficult conditions. To ensure a robust position in the long term, however, it is essential that we also diversify our portfolio by expanding outside of Europe,” says Klemens Haselsteiner, CEO of Strabag.

“Australia fulfils all the key criteria that are important to us in this regard: a sound financial budget, legal certainty and high standards of business compliance.”

The Strabag Group has already been active in Australia in the past, having worked on individual projects such as the Alkimos wastewater treatment project and the seawater intake and outfall project in Perth. With this transaction, Strabag aims to establish a permanent business presence in the country

Current projects of the Georgiou Group include a bridge over the Fitzroy River in Western Australia and The Northern Road in New South Wales.

The current CEO, Gary Georgiou, who is not related to the founding family, will continue to lead the company. “As part of the Strabag Group, Georgiou will benefit from belonging to a large, highly developed multinational company, giving us financial backing and access to proven technical expertise and experience that goes beyond our current resources,” he commented.

“This extension of capabilities offers immense value and opportunities not only for Georgiou as a company, but also for our employees and the Australian construction industry as a whole.”