August 10, 2010
Chinese buyer swoops on Friede Goldman
According to a Hong Kong stock exchange announcement , Zhen Hua Engineering Co., Ltd. , a wholly owned subsidiary of China Communications Construction Company Limited (CCCC), has completed the acquisition of a 100 percent interest in Friede Goldman United, Ltd (F&G), paying $125 million.
F&G has been a leader and innovator in offshore rig design for more than 60 years. Over 10 percent of the world fleet of jack-up rigs and over 20 percent of the semi-submersibles are designed by F&G. Of rigs currently on order worldwide , 25 percent of the semi-submersibles and over 35 percent of the jack-ups are of F&G design. Most rigs built to F&G's design also use equipment packages supplied by F&G.
CCCC and its subsidiaries are principally engaged in the design and construction of transportation infrastructure, dredging and heavy machinery manufacturing business. Among other things, it is the largest port construction and design company in China, and both the largest dredging company in China and the second largest dredging company (in terms of dredging capacity) in the world. It is also the world's largest container crane manufacturer.
CCCC views the Friede Goldman acquisition as an important strategic step in expanding its offshore construction capabilities. In the past few years, CCCC's 46.12 percent held subsidiary, Shanghai Zhenhua Heavy Industry Co. Ltd. ("ZPMC"), has been focusing on building up its offshore construction business, leveraging on its existing world-class capabilities in port machinery manufacturing.
The Friede Goldman acquisition enhances CCCC Group's early stage design capabilities. In addition, it also complements ZPMC's already strong detailed design engineering capabilities, and equipment manufacturing expertise. As such, it is expected to significantly improve CCCC's competitiveness in providing complex offshore construction solutions to Chinese and international customers. CCCC has also identified several other potential areas for synergies between F&G and the CCCC Group, such as further leveraging ZPMC's capabilities in manufacturing offshore equipment.