CIMIC (ASX: CIM) has announced that it plans to sell half of Thiess.
CIMIC is one of Australia’s largest engineering businesses, it used to be called Leighton. It is involved in construction, mining, services and public private partnerships. It’s involved across the lifecycle of assets, infrastructure and resource projects.
CIMIC to sell Thiess?
Thiess is the world’s largest mining services provider according to CIMIC.
CIMIC announced this morning that it has signed an exclusivity agreement and is in advanced negotiations with funds advised by Elliot Advisers.
Why is CIMIC thinking about doing this?
CIMIC said that the introduction of an equity partner in Thiess would capitalise on the “robust outlook” for the mining sector and provide capital for Thiess’ continued growth, while enabling CIMIC to maintain its strong balance sheet.
Management expect that the advanced negotiations will conclude in the coming weeks with a share purchase agreement that will require the usual approvals.
It’s an interesting move for CIMIC to sell half of one of its main divisions. Hopefully it gets a good price for the stake because it will be losing some earnings. CIMIC isn’t my type of business though, I’d rather buy a good growth share.