Grupo Ferrovial decides to merge the construction business carried out by Ferrovial and Agromán


Grupo Ferrovial decides to merge the construction business carried out by Ferrovial and Agromán

The General Stockholders Meeting of the Ferrovial Group, held on 23rd February 1999, decided to proceed with the merger in the Group construction business, carried out, to present, by the companies Ferrovial and Agromán.

The integration shall be carried out by demerger of all the assets and liabilities of the Ferrovial construction activity and their aggregation to Agromán, through a capital increase in the latter company, to be fully subscribed by the Ferrovial Group.

The value of Ferrovial and Agromán

The exchange equation approved today by the Boards of Directors of both companies is based on a relative valuation of Ferrovial to Agromán in construction activities, with a ratio of 2:1.

This relative valuation is verified by a top level Merchant Bank, commissioned by the Board of Directors of Agromán to issue a favourable “fairness opinion”.

Operativity of the new building firm

The integration operation is subject to fulfilment of the requisites foreseen in the mercantile legislation within the necessary legal terms.

The Executive Management for construction activities in the Group shall be co-ordinated immediately, under Joaquín Ayuso, as Managing Director, and Carlos Puente, as General Manager.

Size of the consolidated construction activity

Considering the figures for 1998, the Group construction activity aggregates 358,000 million pesetas; its works portfolio amounts to 631,600 million pesetas; its shareholders funds aggregate 32,000 million pesetas and it has nearly 70,000 million pesetas net in cash and banks.

Minority shareholders of Agromán

One of the priority objectives in this integration process is to allow Agromán minority shareholders participation in the Ferrovial Group. Once the processes of integration and floating on the Stock Exchange of the Ferrovial Group are over, it aims to make a public offer to exchange shares in the Ferrovial Group for shares in Agromán to implement this.

Reasons and objectives for the merger

Since 1995, when the Ferrovial Group acquired a majority stake in Agromán, the company has completed the process of correcting and improving its management, which has also allowed the Ferrovial corporate philosophy and management model to be adopted.

Thus, the merger is now a strategic response to the changes and challenges to be faced, in the near future, by the Spanish construction sector.

The integration will bring about important synergies by allowing best practices to be adopted and collaboration by the best professionals in both organisations, who shall have better opportunities for professional development in the new company.

The operation shall also provide a significant saving on costs, shown by an increase in the value of construction activity for the Group and its shareholders.

Change in company name

The new company formed by integration of the construction activities of both companies is to be named Ferrovial Agromán, S.A.


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