Construction giant Fletcher Building has entered a binding agreement to sell its construction division to major international construction group Vinci Construction for a minimum of $315.6 million.
The figure could increase a further $18.5 million to $334.1 million depending on some contracts the division is currently negotiating.
The sale included its New Zealand business units, Higgins, Brian Perry Civil and Fletcher Construction Major Projects.
Fletcher Building chief executive Andrew Reding said the company had been clear over the past year that the future lay in being a "focused building products manufacturer and distributor, supported by a strong balance sheet and disciplined capital allocation".
"The sale of Fletcher Construction is a significant step forward in delivering that strategy, while continuing the work underway to simplify the portfolio, lower debt and improve shareholder returns."
Reding said he was confident selling to Vinci was right for not only shareholders and Fletcher Construction itself, but the New Zealand construction industry.
"VINCI knows Fletcher Construction well and has a deep commitment to New Zealand and the country’s infrastructure pipeline. That makes it an excellent long-term owner for the business and its people, customers and partners," he said.
"I believe Fletcher Construction will find a strong home with VINCI, whose strengths are well aligned with the business, and which has a proven track record of successfully delivering major infrastructure projects globally."
Fletcher Building also expected to set aside $55-$65m for probable future claims relating to legacy construction contracts retained following the divestment.
However, it did not include any allowances for potential legal liability relating to the NZ International Convention Centre project — these would remain with Fletcher Building.
The decision to sell Fletcher Construction followed a strategic review of the wider Fletcher Building business in 2025.
"Following our strategic review in 2025, we received strong inbound interest for the construction business," Reding said.
This deal was subject to regulatory approvals, including from the Overseas Investment Office and the Commerce Commission.
It was expected the conditions would be satisfied by the end of the year.
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