Hochtief and ACS merge North American subsidiaries
31 July 2024
Spainish conglomerate ACS and German construction company Hochtief have agreed to merge their US subsidiaries Flatiron and Dragados creating the second largest civil engineering and construction company in North America.
In a statement to investors, ACS and Hochtief said that they had agreed on key terms for the creation of the new company which will be owned 61.8% by ACS and 38.2% by Hochtief.
Image: ACS/Hochtief
The pair said the merger would create synergies and economies of scale while the simplified structure of the new entity would ensure a consistent approach to operations, including tender processes, procurement strategies and risk management.
ACS already holds more than 75% of the shares in Hochtief.
The new company, which will be named Flatiron Dragados, will be managed by Peter Davoren as chairman (in addition to his current role as chairman, CEO and president of Turner Construction) and Javier Sevilla, the current CEO of Flatiron will act as CEO.
Flatiron Dragados, which currently has a presence in 24 US states and eight Canadian provinces, said that it had a backlog of US$17.2 billion in H1 2024, of which approximately 40% are collaborative projects.
Between them, Flatiron and Dragados had a combined revenue of US$6.1 billion in 2023 and US$3.1 billion in H1 2024.
Chief Executive Officer of Hochtief, Juan Santamaría, said, “Bringing together Flatiron and Dragados creates a strong platform for organic growth in North America. They have the expertise, the long-term clients and are geographically complementary, providing significant synergies and economies of scale. We differentiate our commercial offering through our superior technical resources and skills.”
