French construction company Vinci has completed the acquisition of the Cobra IS energy business of Spanish engineering outfit ACS in a deal that includes taking control of a 15GW renewables pipeline.
The €4.9 billion purchase was wrapped up today after the initial announcement on 1 April.
The scope of the acquisition covers a platform for the development of renewable energy projects.
Vinci said its business model will be enhanced by the expertise of Cobra IS in the development of renewable energy concessions.
The group intends to become a significant player in this sector, with new opportunities identified in the short and medium term, ultimately representing a total capacity of around 15GW mainly in photovoltaics and onshore wind power.
Future investment in offshore wind may also be considered.
Vinci said its financial strength will be an additional asset to accelerate the growth of the new group in the management and operation of renewable energy assets over time.
The scope of the acquisition also covers almost all of the contracting activities of the ACS Industrial Services division, as well as nine concession projects and one greenfield one under development or under construction, mainly electricity transmission networks in Latin America.
Vinci said closing the deal is a major step in its strategy to create a world leader in energy engineering, works and services and to develop renewable energy concession projects.
“The group thus intends to enrich its portfolio of concessions and extend its average maturity, while contributing to the environmental transition,” it said.
This acquisition benefits from strong geographical synergies, with the ACS’s experience of turnkey EPC projects in the energy sector and a strong local foothold in the Iberian Peninsula and in Latin America key.
The price of the transaction, entirely financed by Vinci’s available cash, comes to 4.9 billion euros, an enterprise value of €4.2 billion to which an amount of €700m corresponding to the cash flow of the new group as well as to various adjustments has been added.
ACS will receive a price supplement of €40m for each new gigawatt of ready-to-build renewable energy developed by Cobra IS over a period of 8.5 years, up to a total limit of 15GW, a maximum additional amount of €600m.
In addition, Vinci and ACS have finalized a joint-venture agreement, providing for the creation of a new entity which will have the right to acquire, at market price, the renewable energy assets developed, financed, built and connected to the electricity grid by Cobra. Vinci will own 51% of this entity and will fully consolidate it.
Xavier Huillard, Chairman and CEO of Vinci, said: “The integration into Vinci of ACS’s energy activities, including its renewable energy project development platform, is excellent news for the Group.
“This strategic transaction aims not only to build a world leader in energy-related engineering, works and services – a sector in which VINCI is already very present – but also to accelerate, thanks to the experience acquired over many years by Cobra IS, its development in renewable energies and thus strengthen its contribution to the environmental transition.”