Hard on the heels of the sale of its John Holland unit, construction group Leighton Holdings has completed the sale of a half share in its assets services arm in a $1.1 billion deal.
The move to establish an even share joint venture with Apollo Global Management marks a significant step forward in its restructuring since the Spanish-controlled Hochtief took control earlier in the year.
It will see the joint-venture take on the merged operations and maintenance services businesses of Thiess Services and Leighton Contractors Services.
Late last week, Leighton sold John Holland for an unspecified amount to China Communication Construction Co, an entity listed on the Hong Kong and Shanghai stock exchanges. Analysts estimate John Holland raised as much as $1.1 billion.
A statement to the ASX released late on Wednesday said the deal with Apollo valued the services business at $1.1 billion and would deliver about $700 million to Leighton.
"By choosing to partner with funds managed by Apollo... we gain access to Apollo's expertise in creating a single, integrated and efficient business which will be better able to compete in the Australian marketplace,"' said Leighton Holdings executive chairman Marcelino Fernandez Verdes.
He said the deal would also allow Leighton to maintain exposure to the services sector.
The new joint venutre will be one of the largest services firms in Austrlaia with revenue of more than $2.2 billion, $4 billion of work in hand and about 6400 employees.
"We are very excited to invest in two great businesses in partnership with Leighton," Apollo senior partner Steve Martinez said.
The completion of these first two asset sales in such a short time is expected to have a significant impact on Leighton's finances by the December 31 balance date, even though there may be contingencies that could limit the actual amount received from the sales.
The Apollo deal is subject to approval by the Foreign Investment Review Board.